On April 23, 2025, WilmerHale obtained a significant victory for the private investment firm 1Globe Capital when a U.S. District Court for the District of Massachusetts judge denied the plaintiff leave to file a second amended complaint in a class action brought on behalf of shareholders of Sinovac.
After the ruling, the plaintiff, MW Gestion, dismissed its remaining claim against the Boston-based 1Globe with prejudice, bringing years of litigation in district court to an end.
“We were very glad to achieve this result for our client,” said Partners Michael Bongiorno and Timothy Perla. “This resolves years of litigation with a favorable outcome in district court for 1Globe Capital.”
The case arose from a protracted legal battle over a shareholder rights agreement that Sinovac adopted in 2016 amid a proposed management buy-out that a majority of shareholders did not support. The agreement contained a so-called poison pill provision that granted shareholders the right to make dilutive stock purchases through an exchange should another shareholder or group acquire or control more than 15% of Sinovac’s stock or announce a plan to do so.
At an annual company meeting in 2018, shareholders elected a slate of new directors, prompting retaliation by the incumbent directors. They accused 1Globe and other shareholders of banding together to oppose their reelection and asserted that, by doing so, 1Globe and the other shareholders had triggered the poison pill provision of the shareholder rights agreement.
Litigation ensued in both the Delaware Court of Chancery (brought by Sinovac against 1Globe and other shareholders) and Antigua, where Sinovac is incorporated (brought by 1Globe and other shareholders against Sinovac). The parties to these cases sought judicial guidance on whether the vote at the 2018 annual meeting ousting the incumbent directors was legitimate and whether coordination of shareholder votes, if any, triggered the poison pill provision.
In February 2019, while these cases were still pending, Sinovac’s incumbent directors took the highly unusual step of passing a resolution declaring that 1Globe and others had triggered the poison pill when voting against the incumbent directors at the annual meeting.
In 2022, the French investment firm MW Gestion filed a complaint against 1Globe Capital on behalf of Sinovac shareholders, alleging that 1Globe made false or misleading statements about its holdings in Sinovac stock and impermissibly interfered with the shareholder rights agreement by delaying its implementation.
A year later, WilmerHale moved to dismiss, arguing that MW Gestion’s claims under Section 10(b) of the 1934 Securities Exchange Act were time-barred, improperly predicated on a violation of reporting requirements for stock holdings, and failed to allege the required elements. The firm further argued that the claim alleging that 1Globe had impermissibly interfered with the shareholder rights agreement was time-barred, impermissibly brought under state law, and failed to allege the required elements.
On August 18, 2023, Judge Nathaniel Gorton of the U.S. District Court for the District of Massachusetts granted the motion to dismiss in part, which left only MW Gestion’s tortious interference claim intact.
Meanwhile, earlier this year, the Judicial Committee of the Privy Council, which is based in the United Kingdom and is the highest court of appeal for Antigua, found that the shareholder rights agreement was invalid and that Sinovac’s shareholders had validly elected the new directors at the 2018 annual meeting.
MW Gestion, however, refused to dismiss its case in Massachusetts and pressed the district court for an opportunity to amend its complaint to plead a tortious interference claim that allegedly was not dependent on the validity of the shareholder rights agreement.
On April 23, 2025, Judge Gorton denied MW Gestion’s motion for leave to amend on the ground that MW Gestion had unduly delayed in seeking amendment.
A month later, MW Gestion voluntarily withdrew its remaining claim with prejudice.
The WilmerHale team included Bongiorno, Perla (who argued the motion to stay), Erika Schutzman, Andrew Jumper and Emily O’Hara.