IBM-HashiCorp: Shareholder lawsuit seeks to thwart $6.4 billion takeover

However, Graff’s lawsuit suggests a different narrative. The complaint filed Monday in the U.S. District Court for the Northern District of California names several key people on HashiCorp’s board, including CEO Dave McJannet and CTO Armon Dadgar, as well as other executives, accusing them of orchestrating the deal in to secure personal financial benefits. According to the lawsuit, insiders hold significant amounts of illiquid shares that will be converted into cash or liquid shares, providing them with significant windfall financial gains.

“Company insiders currently own large, illiquid portions of the Company’s stock, Company options and Company Restricted Stock Units, all of which will be exchanged in exchange for the merger upon consummation of the Proposed Transaction, rather than shared between Plaintiff and the Company’s other public stockholders Companies,” the complaint said. For example, McJannet is reported to own shares, options and proprietary units worth $270 million, while Dadgar’s holdings are valued at $646 million, as mentioned in the lawsuit.

“The distribution of the benefits of the transaction indicates that the primary beneficiaries of the Proposed Transaction are HashiCorp’s employees, and not the Company’s public shareholders such as Plaintiff,” the complaint stated. “The Company’s board of directors and officers are conflicted because they will secure unique benefits from the Proposed Transaction that are not available to Plaintiff as a public shareholder of HashiCorp.”