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Cravath, Swaine & New York. (Photo: Mike Scarcella/ALM) Cravath, Swaine & Moore in New York. (Photo: Mike Scarcella/ALM)

Cravath Swaine & Moore is facing a shareholder lawsuit alleging it helped a publicly traded grocery chain conduct a “sham auction” that ensured it would be sold to private equity giant Apollo Global Management.

The allegation against one of the best-known law firm brands in M&A work was made in a complaint filed late last week in Delaware Chancery Court. Cravath was paid a $5.5 million flat fee for its representation of The Fresh Market board of directors in the company’s nearly $1.4 billion cash sale to Apollo in late 2016, the suit says.

The broad allegations laid out in last week’s lawsuit are not entirely new; the transaction had already been the focus of a shareholder lawsuit that was dismissed by a Delaware trial court in 2017. But the suit was revived by a Delaware appeals court ruling in July that said the company had failed to disclose facts suggesting The Fresh Market’s founder preferred a sale to Apollo. Following discovery in that case, Cravath, The Fresh Market’s general counsel Scott Duggan and JP Morgan Securities LLC were named as defendants in the case for the first time last week in an amended complaint.

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