January 16, 2024
Willkie litigators recently obtained a total victory for Insight Partners (Insight) and its co-founder/managing director Jeffrey Horing in the Delaware Court of Chancery by securing the dismissal of a complaint challenging nCino Inc.'s $1.2 billion acquisition of SimpleNexus LLC in August 2021.
According to the plaintiff, nCino’s purchase of SimpleNexus was unfair because Insight stood on both sides of the transaction and had caused nCino to overpay for SimpleNexus. Insight had previously been nCino's majority stockholder before nCino went public in 2020, and Insight was also SimpleNexus's majority stockholder. The plaintiff emphasized that nCino had purchased SimpleNexus for $1.2 billion even though Insight had purchased its majority stake in SimpleNexus just seven months earlier allegedly at an implied valuation of $169 million. Plaintiff sought more than $744 million in damages based on Insight’s profits from the transaction.
Vice Chancellor Zurn rejected the plaintiff’s arguments, and decisively ruled in Insight's and the nCino directors' favor. The Court found that a majority of nCino's board of directors was disinterested and independent of Insight, and so the plaintiff had not shown that a stockholder litigation demand would be futile, as required to assert a derivative claim on behalf of nCino under Delaware law. Defendants prevailed by pointing out that only a single director on nCino's seven-member board was directly employed by Insight, that Insight's lone director had been walled off from the transaction process, and that Insight held only a minority stake in nCino at the time the complaint was filed. The Court also held that Insight's influence over the election of nCino’s directors as 32% stockholder—as well as the plaintiff's attempts to draw ties between Insight and the nCino directors—did not impair the nCino directors' ability to independently consider litigation against Insight.
The Willkie litigation team consisted of partners Jeffrey Korn, Tariq Mundiya and Richard Li, and associates Ciara Sisco and John Catalanotto.
According to the plaintiff, nCino’s purchase of SimpleNexus was unfair because Insight stood on both sides of the transaction and had caused nCino to overpay for SimpleNexus. Insight had previously been nCino's majority stockholder before nCino went public in 2020, and Insight was also SimpleNexus's majority stockholder. The plaintiff emphasized that nCino had purchased SimpleNexus for $1.2 billion even though Insight had purchased its majority stake in SimpleNexus just seven months earlier allegedly at an implied valuation of $169 million. Plaintiff sought more than $744 million in damages based on Insight’s profits from the transaction.
Vice Chancellor Zurn rejected the plaintiff’s arguments, and decisively ruled in Insight's and the nCino directors' favor. The Court found that a majority of nCino's board of directors was disinterested and independent of Insight, and so the plaintiff had not shown that a stockholder litigation demand would be futile, as required to assert a derivative claim on behalf of nCino under Delaware law. Defendants prevailed by pointing out that only a single director on nCino's seven-member board was directly employed by Insight, that Insight's lone director had been walled off from the transaction process, and that Insight held only a minority stake in nCino at the time the complaint was filed. The Court also held that Insight's influence over the election of nCino’s directors as 32% stockholder—as well as the plaintiff's attempts to draw ties between Insight and the nCino directors—did not impair the nCino directors' ability to independently consider litigation against Insight.
The Willkie litigation team consisted of partners Jeffrey Korn, Tariq Mundiya and Richard Li, and associates Ciara Sisco and John Catalanotto.
