Shareholders sue Sun over Oracle deal

09 May 2009

Shareholders of Sun Microsystems have slapped the company with three class-action suits seeking to block its acquisition by Oracle. The shareholders have also named Oracle in the lawsuits.

Sun made the disclosure about the lawsuits in its quarterly earnings filing with the Securities and Exchange Commission (SEC). The company admitted that it is investigating possible incidents of violation of US laws by its employees bribing foreign officials.

"Three putative shareholder class actions were filed by individual shareholders ... naming Sun and certain of our officers and directors, as well as Oracle Corporation, as defendants," the company said in its most recent 10-Q filing.

"The complaints seek to enjoin the proposed acquisition of Sun by Oracle Corporation and allege claims for breach of fiduciary duty against the individual defendants and for aiding and abetting a breach of fiduciary duty against the corporate defendants."

The main complaint is that the consideration offered in the proposed transaction is unfair and inadequate," according to Sun. "Sun and the other defendants have not yet responded to the complaints," it added.

Sun, which  had been looking for a turnaround in its struggling business, struck a deal with Oracle after its merger talks with IBM failed.