In re Santander Consumer USA Holdings Inc. Stockholders Litigation

Court: Delaware Court of Chancery
Case Number: 2022-0689-LWW
Case Leaders: Jeroen van Kwawegen, Edward G. Timlin
Case Team: Andrew Blumberg, Glenn R. McGillivray, Margaret Sanborn-Lowing, Abe Alexander, David Carlet

On August 5, 2022, BLB&G filed a class action complaint (the “Complaint”) on behalf of The Liverpool Limited Partnership and Elliott International L.P. (the “Liverpool Plaintiffs”) and similarly situated former public stockholders of Santander Consumer USA Holdings Inc. (“SCUSA” or the “Company”) asserting breach of fiduciary duty claims against the Company’s controlling stockholder, Santander Holdings USA, Inc. (“Holdings”), Holdings’ parent and the Company’s ultimate parent, Banco Santander, S.A. (“Banco Santander” and together with Holdings, the “Controller Defendants”), and members of the Company’s board of directors (the “Company Board” or the “Board”) related to the January 2022 acquisition of the Company by Holdings and Banco Santander. Holdings and Banco Santander acquired all outstanding Company shares that Holdings did not previously own through a two-step tender offer and merger pursuant to 8 Del. C. § 251(h), resulting in the Company becoming a wholly-owned subsidiary of Holdings (the “Acquisition”).

The case arises from one of the largest minority squeeze-out transactions in history. The Controller Defendants, who owned over 80% ownership of the Company before the Acquisition and employed a coercive transaction structure with no minimum tender condition, ensured that the deal would close even if every last minority stockholder opposed the Acquisition. Plaintiffs’ allegations are based on, inter alia, their review of books and records produced by the Company in response to demands made under 8 Del. C. § 220, which were litigated in the now-dismissed action entitled In re Santander Consumer USA Holdings, Inc., Coordinated C.A. No. 2021-0853-LWW.

On September 16, 2022, Plaintiffs filed an unopposed motion consolidating the action filed by the Liverpool Plaintiffs with the action filed by Plaintiffs Lycoming County Employees’ Retirement System and Central Laborers’ Pension Fund (the “Lycoming Plaintiffs”) on August 16, 2022 in Lycoming County Employees’ Retirement System, et al. v. Santander Holdings USA, Inc. et al., C.A. No. 2022-0723-LWW. The motion further sought to: (i) appoint the Liverpool Plaintiffs as Lead Plaintiffs and the Lycoming Plaintiffs as additional plaintiffs in the consolidated action, (ii) appoint BLB&G as Lead Counsel and Kessler Topaz Meltzer Check, LLP and Block & Leviton LLP as additional counsel, and (iii) designate the Complaint as the operative complaint in the consolidated action. The Court granted the motion on September 19, 2022.

The Controller Defendants did not file a motion to dismiss. The parties are currently in discovery. BLB&G continues to vigorously prosecute this action.