Akin Gump Litigators Secure Victory for Eastman Kodak Company in Multiple Shareholder Derivative and Purported Class Actions

(New York) – Akin Gump’s litigants, Neal Marder and Steve Baldini, received a Litigator of the Week Shout Out for their client Eastman Kodak Company on September 27, 2022, complete Kodak’s joint motion and each defendant’s motion to dismiss the consolidated alleged class action lawsuits against securities without giving the plaintiffs an opportunity to repeat themselves.

In late 2020, separate putative securities class actions were filed with the DNJ and the SDNY, which were ultimately consolidated at the WDNY in June 2021. After the lead plaintiffs were appointed, they filed a consolidated amended complaint on behalf of an alleged group of Kodak stockholders, alleging claims against Kodak and certain current and former officers and directors arising out of events related to a letter of interest ( “LOI”), entered into between Kodak and US International Development Finance Corporation (“DFC”) in July 2020, discussing a contemplated loan of $765 million from DFC to Kodak in support of the transition of Kodak’s manufacturing facilities to Manufacture of certain chemical ingredients used in pharmaceutical products. Specifically, Plaintiffs (i) asserted a Section 10(b) and Rule 10b-5(b) claim alleging that Kodak and its CEO made false statements regarding the assurance that Kodak would receive the loan, and that the week in which the LOI was announced was omitted. Certain officers were granted stock options which plaintiffs alleged were unduly “sprung” (ii) a Section 10(b) and Rule 10b- 5(a) and (c), alleging that the Defendants engaged in deception or manipulation of the Plan through the alleged misstatements and omissions relating to the option grant, and (iii) a Section 20(a) action Liability of the Controller to the Individual Defendants.

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The Akin team led the motion to dismiss the briefing, and Mr. Marder and his attorney, Stephanie Lindemuth, chaired the lengthy hearing on the motion, which was supported by other leading defense firms representing each defendant. In granting the motion in its entirety, Judge Wolford accepted essentially all of the defendants’ arguments. The court ruled that none of the alleged misrepresentations or alleged failure to grant stock options were punishable under federal securities laws. The Court further found that the plaintiffs did not bring an actionable system liability claim because it wrongly based it entirely on the unenforceable misrepresentations and omission of the claim under Rule 10b-5(b) and failed to identify, in particular, additional or actionable misleading or Making manipulative claims Behavior on which the claim is based. Due to the dismissal of the primary liability claims, the court also dismissed the secondary controller liability claim against each defendant.

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Messrs. Marder and Baldini are the lead attorneys in this case. The Akin Gump team also included Counsel Stephanie Lindemuth, Josh Rubin and Sina Safvati, and Associate Lillian Rand. This is the same team that obtained a dismissal pending an alleged direct shareholder class action lawsuit filed in the New York Supreme Court in May of this year.

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Akin Gump Strauss Hauer & Feld LLP is a leading international law firm with more than 900 attorneys in offices throughout the United States, Europe, Asia and the Middle East.