Millennial Media Board Beats Suit Over $238M AOL Merger

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By Michael Greene

Sept. 28 — Millennial Media Inc. directors made sufficient disclosures about the company's $238 million merger with AOL Inc., the Delaware Chancery Court ruled, dismissing a shareholder suit ( Nguyen v. Barrett, 2016 BL 319536, Del. Ch., No. 11511-VCG, 9/28/16 ).

An Nguyen alleged that Millennial issued faulty disclosures concerning certain financial projections and its financial adviser's contingent-fee arrangement.

Because Millennial had a charter provision that shields board members from liability for breach of the duty of care, the only recourse left to the shareholder was to show a breach of the duty of loyalty, Vice Chancellor Sam Glasscock III said.

The court dismissed the claims, finding Nguyen failed to show that the directors acted disloyally by deliberately withholding information or by neglecting required tasks.

Disclosure Claims

Millennial, a Baltimore-based mobile advertising company, was acquired by AOL in October 2015.

Nguyen argued that Millennial had a duty to disclose certain financial projections that its financial adviser—LUMA Securities LLC—used in its valuation of the company. Alternatively, the shareholder argued that Millennial's proxy misled investors that management, not LUMA, had created the projections.

The court also dismissed the shareholder's claim that the company had to provide more information about how its financial adviser would be paid. It found that Millennial's disclosure that a substantial portion of LUMA's fee was contingent upon the completion of the merger was adequate.

“This Court has repeatedly held that such a disclosure regarding advisor fees, absent some indication that the fee was exorbitant or unusual, or otherwise improper, is sufficient,” Glasscock wrote.

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To contact the editor responsible for this story: Yin Wilczek at

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