NEW YORK, April 29, 2005 (PRIMEZONE) -- The law firm of Kirby McInerney & Squire, LLP announces that the parties have agreed to settle In re eBay, Inc. Shareholders Litigation, a shareholder derivative action commenced on behalf of eBay (NASDAQ:EBAY). The settlement is subject to the approval of the Delaware Chancery Court, where the action is pending. Under the terms of the settlement, certain officers/directors of eBay, Meg Whitman, Pierre Omidyar, Jeffrey Skoll and Robert Kagle, will collectively pay $3 million to eBay. Additionally, Goldman Sachs Group, Inc. (NYSE:GS), eBay's investment banking firm, will pay $395,000 to eBay. Plaintiffs believe that the proposed settlement is fair and beneficial to eBay and its shareholders. Kirby McInerney & Squire, LLP is co-lead counsel for the plaintiff shareholders in the lawsuit.
The suit alleges that eBay's investment banker, Goldman Sachs, engaged in the practice of "spinning" by allocating shares of initial public offerings of stock to eBay insiders in exchange for continued and future investment banking business from eBay. Plaintiffs allege that corporate insiders at eBay usurped millions of dollars worth of such shares, which rightfully belonged to eBay and its shareholders. Defendants have denied plaintiffs' allegations in this action.
In January 2004, the Delaware Chancery Court found that plaintiffs had stated a valid cause of action against the defendant eBay directors for breaching their fiduciary duty of loyalty to eBay by accepting these shares for themselves and against Goldman for aiding and abetting in the breach. At that time, in his decision allowing the lawsuit to proceed, Chancellor William B. Chandler III, of the Delaware Chancery Court, stated that the complaint "indicate(s) that unique, below-market price investment opportunities were offered by Goldman Sachs to the insider defendants as financial inducements to maintain and secure corporate business." The Court recognized that "the defendant directors were . . . not free to accept this consideration from a company, Goldman Sachs, that was doing significant business with eBay . . . ."
Plaintiffs are represented by Kirby McInerney & Squire, LLP. The firm specializes in complex litigation, including securities class actions, and is active in corporate governance. The firm has repeatedly demonstrated its expertise in this field, and has been recognized by various courts which have appointed the firm to major positions in consolidated and multidistrict litigation. The firm's efforts on behalf of shareholders in securities and shareholder litigation have resulted in recoveries totaling hundreds of millions of dollars, and the firm's achievements and quality of service have been chronicled in numerous published decisions. More information about the firm can be obtained from Kirby McInerney & Squire's website at www.kmslaw.com.