DCG&T et al v. Knight et al

Filing 67

MEMORANDUM OPINION. Signed by District Judge John A. Gibney, Jr on 12/18/2014. (tjoh, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Richmond Division

DCG&T, for the use and benefit of
JACK BATTAGLIA/IRA, et aL,
Plaintiffs,
Civil Case No. 3:14-cv-067-JAG

V.

GLADE M. KNIGHT, et aL,
Defendants.

MEMORANDUM OPINION

Three Virginia corporations that shared overlapping directors and managers merged into

one corporation in March 2014. The shareholders of one of those corporations brought this suit

against its directors and managers, complaining that the merger was the result of a flawed,
conflicted, and ill-considered decision-making process and that the merger diluted the value of
their shares. The shareholders ask the Court to find that the directors and managers breached

their fiduciary duties to the corporation and shareholders and to undo the merger. The directors

and managers filed this motion to dismiss under Federal Rule of Civil Procedure 12(b)(6).
In their amended complaint, the plaintiffs (collectively, "DCG&T") allege several
putative class and derivative claims arising from the merger of three Richmond-based real estate
investment trusts ("REITs"): Apple REIT Nine, Inc. ("A9"), Apple REIT Eight, Inc. ("A8"), and

Apple REIT Seven, Inc. ("A7). After shareholder approval from each entity, A8 and A7 merged