Boothbay Absolute Return Strategies LP v. Belgische…

Background

The plaintiffs—Boothbay Absolute Return Strategies, LP, Boothbay Diversified Alpha Master Fund, LP, Corbin Hedged Equity Fund, L.P., Corbin ERISA Opportunity Fund, Ltd., Pinehurst Partners, L.P., FW Deep Value Opportunities Fund I, LLC, FourWorld Global Opportunities Fund, Ltd., and FourWorld Event Opportunities, LP—are shareholders of Euronav NV. They alleged that defendant Belgische Scheepvaartmaatschappij-Compagnie Maritime Belge SA, which the opinion calls CMB, violated Section 14(e) of the Securities Exchange Act of 1934 by making materially false or misleading statements and omissions in documents for a mandatory tender offer for Euronav shares.

CMB’s tender offer began on February 14, 2024, at $17.86 per share, and was scheduled to expire on March 15, 2024. The plaintiffs claimed that disclosures about a three-part transaction involving Euronav, Frontline, and CMB did not adequately explain the value of Euronav’s arbitration claim against Frontline or the lack of an alleged premium to net asset value in a fleet sale. They argued that the tender-offer price was artificially reduced and should have been at least $2.25 higher per share. CMB and Euronav issued supplemental disclosures during the litigation, and CMB publicly disclosed the lawsuit to shareholders.

Preliminary Injunction

A preliminary injunction is an extraordinary order issued before a final judgment. The court explained that the plaintiffs had to show likely irreparable harm—harm that could not be adequately repaired with money—as well as either a likelihood of success on the merits or a serious legal question, a favorable balance of hardships, and consistency with the public interest.

The court held that the plaintiffs failed to show irreparable harm. It emphasized that the parts of the challenged three-part transaction had already closed, CMB was already Euronav’s controlling shareholder, and the relevant entities would remain separate. The court concluded that no transaction had to be undone to provide relief. It also found that the plaintiffs’ alleged injury was ultimately economic and could be addressed through damages, which the plaintiffs were seeking.

The court further noted that the plaintiffs waited 12 days into the tender offer’s 30-day acceptance period before filing suit. It said the claim appeared substantially, if not entirely, resolved as a practical matter because CMB had provided discovery, CMB and Euronav had supplemented their disclosures, and CMB had disclosed the litigation to shareholders. The court was not persuaded that Section 14(e) required CMB to do more or that the plaintiffs could establish harm based on other shareholders’ decisions.

Although the court did not need to decide the remaining preliminary-injunction requirements after finding no irreparable harm, it briefly addressed them. It said the apparent resolution of the disclosure issue made success on the claim unlikely or left, at most, no serious question requiring an injunction. It also found that the balance of hardships favored CMB because an injunction issued shortly before the deadline could disrupt the parallel Belgian transaction and create uncertainty, while the plaintiffs’ alleged injury could be compensated with money.

The court therefore denied the plaintiffs’ motion for a preliminary injunction. This ruling did not state that the underlying Section 14(e) claim was dismissed or finally decided.

Motions to Seal

CMB also asked to keep certain materials from public view. The court treated materials submitted to help decide the preliminary-injunction motion as court documents subject to a strong presumption of public access. It concluded that confidentiality interests justified sealing Exhibits O, FF, SS, and TT because they contained privileged material.

The court rejected sealing for Exhibits N, R, T, V, W, BB, EE, UU, and RR, including minutes of Euronav’s supervisory board and a Lazard report. It reasoned that Euronav and CMB.Tech were closely affiliated with CMB, Euronav was publicly traded, confidentiality agreements alone were insufficient, CMB had not shown serious commercial harm from disclosure, and public access was important to understanding the court’s decision.

The court ordered that CMB’s motion to seal was granted as to Exhibits O, FF, SS, and TT and denied in all other respects. The parties were ordered to publicly file versions of the preliminary-injunction materials conforming to that ruling no later than March 13, 2024, and to submit a proposed case-management plan through a joint letter by March 27, 2024.