Jaroslawicz v. M&T Bank Corporation, et al.

Analysis Group was retained on behalf of M&T Bank Corporation and related entities, defendants in a shareholder class action. The plaintiffs alleged that disclosures in a proxy statement to shareholders omitted material information regarding regulatory issues that significantly delayed the bank’s $3.7 billion merger with Hudson City Bancorp.

An Analysis Group team led by Managing Principals Mark Howrey and Gaurav Jetley, Principal Xinyu Ji, and Vice Presidents Emma Dong, Alex Fiore, Ilona Mostipan, and Mike Nguyen supported three affiliated experts in the matter:

• Professor David J. Denis evaluated the plaintiffs’ damages theories and methodologies, including whether the alleged disclosure deficiencies could be linked to any economic loss.
• Professor Wei Jiang analyzed the presence of merger arbitrageurs in the proposed class and resulting implications for class-wide damages.
• Charles H. Grice, a regulatory and risk management expert, offered an opinion about bank examinations and the bank merger review process.

At the class certification stage, the US District Court for the District of Delaware considered concerns about heterogeneity among shareholders, including issues related to merger arbitrageurs raised by Professor Jiang, as well as whether plaintiffs could establish loss causation and damages through common evidence. The judge denied class certification, citing critiques advanced by Professor Denis in concluding that the plaintiffs’ event study did not provide a sufficient basis to measure or attribute alleged losses across the class.

The court ultimately granted summary judgment for defendants on all remaining claims, finding that the plaintiffs’ damages theories were “wholly speculative.” The court rejected the plaintiffs’ event study for failing to account for confounding factors and for relying on unsupported event dates, reasoning consistent with Professor Denis’s report. The court also concluded that M&T Bank was barred from certain disclosures due to bank examination privilege, citing to analysis by Mr. Grice, for which “Plaintiffs offered no rebuttal expert testimony.”