Plaintiffs in the courts of Delaware achieved their biggest victory ever on August 27, when the state’s supreme court upheld a $2 billion award and attorney fees of $304 million in a derivative suit filed by minority shareholders of Southern Peru Copper Corporation. But the jaw-dropping numbers don’t capture another striking anomaly in the case: The court failed to hold liable the parties that it thought were really responsible for the ill-fated deal at the heart of the litigation.
In its 110-page ruling, the supreme court heaped scorn on the independent committee set up to evaluate Southern Peru’s $3.7 billion acquisition of Minera México from Grupo México S.A.B. de C.V. nearly a decade ago. Because Grupo México holds a controlling interest in Southern Peru (now Southern Copper Corporation), the related-party deal was fraught with conflicts. That meant that the special committee of Southern Peru directors, then represented by Latham & Watkins and Goldman Sachs & Co., needed to take special care to make sure that the deal was fair to Southern Peru’s minority shareholders.
