INSIGHT: First Department Reverses Injunctions Against Fuji-Xerox Merger

On October 16, 2018, the Appellate Division, First Department lifted several injunctions granted by the Commercial Division that had restrained a proposed merger deal between Xerox and Fujifilm (‘‘Fuji’’), and dismissed the Xerox shareholders’ actions against Fuji. Deason v. Fujifilm Holdings Corp., No. 650675/18, 2018 BL 380437 (App. Div. 1st Dep’t Oct. 16, 2018). This appeal overturned decisions by Justice Barry Ostrager of the New York Commercial Division that led to a change in Xerox’s Board of Directors, and resulted in six Board seats being selected by two minority shareholders, Carl Icahn and Darwin Deason. Although the First Department lifted the injunctions (allowing the proposed deal to go forward if it remains viable), the changes to Xerox’s Board of Directors likely cannot be undone. As discussed in more detail below, the parties’ settlement agreements contemplate the new Xerox Board pursuing another future Xerox acquisition with Fuji or other third parties.

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