Case 3:22-cv-05136-SK Document 1 Filed 09/09/22 Page 1 of 16
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`Joel E. Elkins (SBN 256020)
`jelkins@weisslawllp.com
`WEISS LAW
`611 Wilshire Blvd., Suite 808
`Los Angeles, CA 90017
`Telephone: 310/208-2800
`Facsimile: 310/209-2348
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`Attorneys for Plaintiff
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`Case No.
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`
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`COMPLAINT FOR
`VIOLATIONS OF THE
`FEDERAL SECURITIES LAWS
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`JURY TRIAL DEMANDED
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`SHOSHANA MINZER,
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`Plaintiff,
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` vs.
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`GLOBAL BLOOD THERAPEUTICS, INC.,
`TED W. LOVE, GLENN F. PIERCE, DAWN
`A. SVORONOS, PHILIP A. PIZZO, ALEXIS
`A. THOMPSON, WENDY L. YARNO,
`SCOTT W. MORRISON, DEVAL L.
`PATRICK, and MARK L. PERRY,
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` Defendants.
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`Plaintiff Shoshana Minzer (“Plaintiff”), upon information and belief, including an
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`examination and inquiry conducted by and through her counsel, except as to those allegations
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`pertaining to Plaintiff, which are alleged upon personal belief, alleges the following for her
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`Complaint:
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`COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS
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`Case 3:22-cv-05136-SK Document 1 Filed 09/09/22 Page 2 of 16
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`NATURE OF THE ACTION
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`This is an action brought by Plaintiff against Global Blood Therapeutics, Inc. (“GBT” or the
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`“Company”) and the members of GBT’s Board of Directors (the “Board” or the “Individual
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`Defendants”) for their violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934
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`(the “Exchange Act”), 15 U.S.C. §§ 78n(a), 78t(a), and U.S. Securities and Exchange Commission
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`(“SEC”) Rule 14a-9, 17 C.F.R. § 240.14a-9, and to enjoin the vote on a proposed transaction, pursuant
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`to which GBT will be acquired by Pfizer Inc. (“Pfizer”) through Pfizer’s subsidiary Ribeye
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`Acquisition Corp. (“Merger Sub”) (the “Proposed Transaction”).
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`2.
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`On August 8, 2022, GBT and Pfizer issued a joint press release announcing entry into
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`an Agreement and Plan of Merger dated August 7, 2022 (the “Merger Agreement”) to sell GBT to
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`Pfizer. Under the terms of the Merger Agreement, each GBT stockholder will receive $68.50 in cash
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`for each share of GBT common stock (the “Merger Consideration”). The Proposed Transaction is
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`valued at approximately $5.4 billion.
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`3.
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`On August 31, 2022, GBT filed a Schedule 14A Definitive Proxy Statement (the
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`“Proxy Statement”) with the SEC. The Proxy Statement, which recommends that GBT stockholders
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`vote in favor of the Proposed Transaction, omits or misrepresents material information concerning,
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`among other things: (i) the Company’s projections; (ii) the data and inputs underlying the financial
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`valuation analyses that support the fairness opinions provided by the Company’s financial advisors
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`J.P. Morgan Securities LLC (“J.P. Morgan”) and Centerview Partners LLC (“Centerview”); and (iii)
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`Centerview’s potential conflicts of interest. Defendants authorized the issuance of the false and
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`misleading Proxy Statement in violation of Sections 14(a) and 20(a) of the Exchange Act.
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`4.
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`In short, unless remedied, GBT’s public stockholders will be irreparably harmed
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`because the Proxy Statement’s material misrepresentations and omissions prevent them from making
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`a sufficiently informed voting or appraisal decision on the Proposed Transaction. Plaintiff seeks to
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`Case 3:22-cv-05136-SK Document 1 Filed 09/09/22 Page 3 of 16
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`enjoin the stockholder vote on the Proposed Transaction unless and until such Exchange Act
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`violations are cured.
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`JURISDICTION AND VENUE
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`5.
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`This Court has jurisdiction over the claims asserted herein for violations of Sections
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`14(a) and 20(a) of the Exchange Act and Rule 14a-9 promulgated thereunder pursuant to Section 27
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`of the Exchange Act, 15 U.S.C. § 78aa, and 28 U.S.C. §1331 (federal question jurisdiction).
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`6.
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`The Court has jurisdiction over defendants because each defendant is either a
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`corporation that conducts business in and maintains operations in this District, or is an individual who
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`has sufficient minimum contacts with this District to render the exercise of jurisdiction by this Court
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`permissible under traditional notions of fair play and substantial justice.
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`7.
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`Venue is proper in this District under Section 27 of the Exchange Act, 15 U.S.C. §
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`78aa, as well as under 28 U.S.C. § 1391 because: (i) the Company is headquartered in this District;
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`(ii) one or more of the defendants either resides in or maintains executive offices in this District; and
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`(iii) defendants have received substantial compensation in this District by doing business here and
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`engaging in numerous activities that had an effect in this District.
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`THE PARTIES
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`8.
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`9.
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`Plaintiff is, and has been at all times relevant hereto, a continuous stockholder of GBT.
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`Defendant GBT is a Delaware corporation, with its principal executive offices located
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`at 181 Oyster Point Boulevard, South San Francisco, California 94080. The Company engages in the
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`discovery, development, and delivery of treatments for underserved patient communities with sickle
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`cell disease (“SCD”). GBT’s common stock trades on the Nasdaq Global Select Market under the
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`ticker symbol “GBT.”
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`10.
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`Defendant Ted W. Love (“Love”) has been President and Chief Executive Officer
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`(“CEO”) of the Company since June 2014, and a director since September 2013.
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`Case 3:22-cv-05136-SK Document 1 Filed 09/09/22 Page 4 of 16
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`11.
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`Defendant Glenn F. Pierce (“Pierce”) has been a director of the Company since
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`February 2016.
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`12.
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`Defendant Dawn A. Svoronos (“Svoronos”) has been a director of the Company since
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`December 2018.
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`13.
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`Defendant Philip A. Pizzo (“Pizzo”) has been a director of the Company since
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`September 2015.
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`14.
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`Defendant Alexis A. Thompson (“Thompson”) has been a director of the Company
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`since March 2021.
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`15.
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`Defendant Wendy L. Yarno (“Yarno”) has been a director of the Company since
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`December 2017.
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`16.
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`Defendant Scott W. Morrison (“Morrison”) has been a director of the Company since
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`January 2016.
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`17.
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`Defendant Deval L. Patrick (“Patrick”) has been a director of the Company since May
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`2020, as well as from April 2015 to November 2019.
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`18.
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`Defendant Mark L. Perry (“Perry”) has been a director of the Company since April
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`2015.
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`19.
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`Defendants identified in paragraphs 10-18 are referred to herein as the “Board” or the
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`“Individual Defendants.”
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`OTHER RELEVANT ENTITIES
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`20.
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`Pfizer is a research-based, global biopharmaceutical company. Pfizer applies science
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`and its global resources to bring therapies to people that extend and significantly improve their lives
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`through the discovery, development, manufacturing, marketing, sale, and distribution of
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`biopharmaceutical products worldwide. Pfizer works across developed and emerging markets to
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`Case 3:22-cv-05136-SK Document 1 Filed 09/09/22 Page 5 of 16
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`advance wellness, prevention, treatments, and cures. For the year ended December 31, 2021, Pfizer
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`generated revenues of $81.3 billion and employed approximately 79,000 people worldwide.
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`21. Merger Sub is a Delaware corporation and a wholly-owned subsidiary of Pfizer.
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`Background of the Company
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`SUBSTANTIVE ALLEGATIONS
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`22.
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`Founded in 2011, GBT is a biopharmaceutical company dedicated to the discovery,
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`development and delivery of life-changing treatments that provide hope to underserved patient
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`communities, starting with SCD, a lifelong, devastating inherited blood disorder. The Company has
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`introduced Oxbryta (voxelotor), the first Food and Drug Administration-approved medicine that
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`directly inhibits sickle hemoglobin (HbS) polymerization, the root cause of red blood cell sickling in
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`SCD. GBT is also advancing its pipeline program in SCD with inclacumab, a P-selectin inhibitor in
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`Phase 3 development to address pain crises associated with the disease, and GBT021601 (GBT601),
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`the Company’s next generation HbS polymerization inhibitor. In addition, GBT’s drug discovery
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`teams are working on new targets to develop the next generation of treatments for SCD.
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`23.
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`On May 4, 2022, GBT announced its second quarter 2022 financial results and
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`business developments. With more than 1,200 new prescriptions for Oxbryta® (voxelotor) in the
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`first quarter, the Company recorded Oxbryta® net sales of $55.2 million during the period, an increase
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`of 41% year over year. GBT also launched Oxbryta® in the United Arab Emirates (“UAE”) via the
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`Company’s distributor partnership with Biopharma-MEA. Reflecting on GBT’s results, defendant
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`Love stated:
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`In the first quarter, we achieved two major milestones in our journey to expand patient
`access to Oxbryta. In the U.S., we launched Oxbryta for patients ages 4 to 11,
`including a new age-appropriate formulation, giving us the potential to expand our
`reach to more SCD patients. We’ve received positive feedback on the launch, with
`encouraging trends during the quarter in new prescriptions for this age group as well
`as some incremental growth for the ages 12 and older population. In addition, we
`received marketing authorization from the European Commission for Oxbryta, making
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`Case 3:22-cv-05136-SK Document 1 Filed 09/09/22 Page 6 of 16
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`it the first medicine approved in the EU that directly inhibits the molecular basis of
`sickling and destruction of red blood cells in SCD. This milestone is a key step on our
`path to reach patients in Europe, with an initial focus on launching in Germany and
`establishing reimbursement in key countries.
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`On the clinical front, we are enrolling patients in our two Phase 3 trials evaluating
`inclacumab for the potential reduction of the frequency of vaso-occlusive crises and
`related hospital readmissions. In addition, we expect to soon restart our GBT601
`Phase 1 trial due to interest from the patients, which will also give us the opportunity
`to study an increased dose of 150 mg, and we plan to advance GBT601 into a Phase
`2/3 trial by mid-year. We continue to be excited about GBT601, which we believe has
`the potential to improve clinical outcomes for people living with SCD, in a low-dose,
`once-daily pill.
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`The Proposed Transaction
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`24.
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`On August 8, 2022, GBT and Pfizer issued a joint press release announcing the
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`Proposed Transaction. The press release states, in relevant part:
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`NEW YORK and SOUTH SAN FRANCISCO, Calif., Aug. 08, 2022 (GLOBE
`NEWSWIRE) -- Pfizer Inc. (NYSE: PFE) and Global Blood Therapeutics, Inc. (GBT)
`(NASDAQ: GBT) today announced the companies have entered into a definitive
`agreement under which Pfizer will acquire GBT, a biopharmaceutical company
`dedicated to the discovery, development and delivery of life-changing treatments that
`provide hope to underserved patient communities, starting with sickle cell disease
`(SCD). The acquisition complements and further enhances Pfizer’s more than 30-year
`heritage in rare hematology and reinforces the company’s commitment to SCD by
`bringing expertise and a leading portfolio and pipeline with the potential to address
`the full spectrum of critical needs in this underserved community. Pfizer intends to
`continue to build on the companies’ shared commitment to and engagement with the
`SCD community.
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`Under the terms of the transaction, Pfizer will acquire all the outstanding shares of
`GBT for $68.50 per share in cash, for a total enterprise value of approximately $5.4
`billion, including debt and net of cash acquired. The Boards of Directors of both
`companies have unanimously approved the transaction.
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`SCD is a lifelong, devastating inherited blood disorder impacting millions of people
`worldwide, predominantly in populations of African, Middle Eastern and South Asian
`descent. GBT developed Oxbryta® (voxelotor) tablets, a first-in-class medicine that
`directly targets the root cause of SCD. Oxbryta was approved in the United States in
`November 2019 and is also approved in the European Union, United Arab Emirates,
`Oman and Great Britain. Net sales for Oxbryta were approximately $195 million in
`2021. Leveraging its global platform, Pfizer plans to accelerate distribution of GBT’s
`innovative treatment to parts of the world most impacted by SCD.
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`Case 3:22-cv-05136-SK Document 1 Filed 09/09/22 Page 7 of 16
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`In addition, GBT is developing GBT021601 (GBT601), an oral, once-daily, next-
`generation sickle hemoglobin (HbS) polymerization inhibitor in the Phase 2 portion of
`a Phase 2/3 clinical study. GBT601 has the potential to be a best-in-class agent
`targeting improvement in both hemolysis and frequency of vaso-occlusive crisis
`(VOC). GBT’s promising pipeline also includes inclacumab, a fully human
`monoclonal antibody targeting P-selectin which is being evaluated in two Phase 3
`clinical trials as a potential quarterly treatment to reduce the frequency of VOCs and
`to reduce hospital readmission rates due to VOCs. Both GBT601 and inclacumab have
`received Orphan Drug and Rare Pediatric Disease designations from the U.S. Food
`and Drug Administration (FDA). If approved, GBT’s pipeline and Oxbryta have the
`potential for an SCD franchise that could achieve combined worldwide peak sales of
`more than $3 billion.
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`“Sickle cell disease is the most common inherited blood disorder, and it
`disproportionately affects people of African descent. We are excited to welcome GBT
`colleagues into Pfizer and to work together to transform the lives of patients, as we
`have long sought to address the needs of this underserved community,” said Albert
`Bourla, Chairman and Chief Executive Officer, Pfizer. “The deep market knowledge
`and scientific and clinical capabilities we have built over three decades in rare
`hematology will enable us to accelerate innovation for the sickle cell disease
`community and bring these treatments to patients as quickly as possible.”
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`“Today is an exciting milestone that accelerates GBT’s mission to discover, develop
`and deliver life-changing treatments that provide hope to underserved patient
`communities,” said Ted W. Love, M.D., President and Chief Executive Officer, GBT.
`“Pfizer will broaden and amplify our impact for patients and further propel much-
`needed innovation and resources for the care of people with sickle cell disease and
`other rare diseases, including populations in limited-resource countries. We look
`forward to working together with Pfizer to serve our communities and advance our
`shared goal of improving health equity and expanding access to life-changing
`treatments to create a healthier future for all.”
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`Pfizer expects to finance the transaction with existing cash on hand. The proposed
`transaction is subject to customary closing conditions, including receipt of regulatory
`approvals and approval by GBT’s stockholders.
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`Due to the proposed transaction, GBT will not hold its previously scheduled
`conference call to discuss its second quarter 2022 financial results. The company will
`file its quarterly report on Form 10-Q for the quarter ending June 30, 2022 with
`the U.S. Securities and Exchange Commission announcing those results on August 8,
`2022.
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`Pfizer’s financial advisors for the transaction are Morgan Stanley & Co. LLC and J.P.
`Morgan Sachs & Co. LLC, with Wachtell, Lipton, Rosen & Katz acting as its legal
`advisor. GBT’s financial advisors for the transaction are J.P. Morgan Securities
`LLC and Centerview
`Partners LLC, with Cravath,
`Swaine & Moore
`LLP and Goodwin Procter LLP acting as legal advisors.
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`Case 3:22-cv-05136-SK Document 1 Filed 09/09/22 Page 8 of 16
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`Insiders’ Interests in the Proposed Transaction
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`25.
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`GBT insiders are the primary beneficiaries of the Proposed Transaction, not the
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`Company’s public stockholders. The Board and the Company’s executive officers are conflicted
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`because they will have secured unique benefits for themselves from the Proposed Transaction not
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`available to Plaintiff and the public stockholders of GBT.
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`26.
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`Notably, pursuant to the Merger Agreement, all outstanding Company options,
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`service-based restricted stock units (“RSUs”), and performance-based restricted stock units (“PSUs”),
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`held by Company insiders will vest and convert into the right to receive cash payments. The following
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`table summarizes the value of ordinary shares, Company options, RSUs, and PSUs that Company
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`insiders stand to receive upon closing of the merger:
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`Case 3:22-cv-05136-SK Document 1 Filed 09/09/22 Page 9 of 16
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`27. Moreover, if they are terminated in connection with the Proposed Transaction, GBT’s
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`named executive officers stand to receive substantial cash severance, as set forth in the following
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`table:
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`The Proxy Statement Contains Material Misstatements or Omissions
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`28.
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`The defendants filed a materially incomplete and misleading Proxy Statement with the
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`SEC and disseminated it to GBT’s stockholders. The Proxy Statement misrepresents or omits
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`material information that is necessary for the Company’s stockholders to make an informed decision
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`whether to vote in favor of the Proposed Transaction or seek appraisal.
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`29.
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`Specifically, as set forth below, the Proxy Statement fails to provide Company
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`stockholders with material information or provides them with materially misleading information
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`concerning: (i) the Company’s financial projections; (ii) the data and inputs underlying the financial
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`valuation analyses that support the fairness opinions provided by J.P. Morgan and Centerview; and
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`(iii) Centerview’s potential conflicts of interest.
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`Material Omissions Concerning the Company Financial Projections
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`30.
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`The Proxy Statement omits material information regarding the Company’s financial
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`projections.
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`31.
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`Specifically, the Proxy Statement sets forth that:
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`[o]n August 3, 2022, the Board, along with members of management and
`representatives of the Company’s financial advisors, Cravath and Goodwin, met
`virtually to discuss, among other topics, updated projections refined by the Company’s
`management reflecting certain updates since June 14, 2022 . . .. At the meeting,
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`Case 3:22-cv-05136-SK Document 1 Filed 09/09/22 Page 10 of 16
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`members of the Company’s management presented updated projections to the Board
`(as described below in the section of this proxy statement entitled “— Certain
`Financial Forecasts”). Following discussion, the Board authorized such projections for
`use by the Board in evaluating the potential transaction with Pfizer and by the
`Company’s financial advisors in their financial analyses in connection with the
`potential delivery of their respective fairness opinions.
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`Proxy Statement at 31. The Proxy Statement fails to disclose the specific updates made to the
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`Company’s projections and whether these updates increased or decreased the Company’s projected
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`(i) Risk-Adjusted Revenue, (ii) EBIT, and (iii) Unlevered Free Cash Flow.
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`32.
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`Additionally, the Proxy Statement discloses the Company’s risk-adjusted projections
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`but fails to disclose (i) the unadjusted projections, (ii) quantify the impact the risk-adjustments had to
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`the company’s projections, and (iii) detail and quantify the specific risk-adjustments made to the
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`Company’s projections.
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`Material Omissions Concerning J.P. Morgan’s and Centerview’s Financial Analyses
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`33.
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`The Proxy Statement omits material information regarding J.P. Morgan’s and
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`Centerview’s financial analyses.
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`34.
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`The Proxy Statement describes J.P. Morgan’s and Centerview’s fairness opinions and
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`the various valuation analyses they performed in support of their opinions. However, the descriptions
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`of J.P. Morgan’s and Centerview’s fairness opinions and analyses fail to include key inputs and
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`assumptions underlying these analyses. Without this information, as described below, GBT’s public
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`stockholders are unable to fully understand these analyses and, thus, are unable to determine what
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`weight, if any, to place on J.P. Morgan’s and Centerview’s fairness opinions in determining whether
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`to vote in favor of the Proposed Transaction or seek appraisal.
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`35. With respect to J.P. Morgan’s Public Trading Multiples analysis and Selected
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`Transaction Analysis, the Proxy Statement fails to disclose the individual multiples and financial
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`metrics for each of the companies and transactions analyzed.
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`Case 3:22-cv-05136-SK Document 1 Filed 09/09/22 Page 11 of 16
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`36. With respect to J.P. Morgan’s Discounted Cash Flow Analysis, the Proxy Statement
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`fails to disclose: (i) quantification of the inputs and assumptions underlying the discount rates of
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`10.5% to 13.5% used in the analysis; and (ii) the number of outstanding shares of GBT common stock
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`used in the analysis.
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`37. With respect to Centerview’s Selected Public Company Analysis and Selected
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`Precedent Transaction Analysis, the Proxy Statement fails to disclose the individual multiples and
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`financial metrics for each of the companies and transactions analyzed.
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`38. With respect to Centerview’s Discounted Cash Flow Analysis, the Proxy Statement
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`fails to disclose: (i) quantification of the perpetual growth rates used in the analysis; (ii) quantification
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`of the inputs and assumptions underlying the discount rates of 10.5% to 12.5% used in the analysis;
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`and (iii) the number of diluted outstanding shares of GBT common stock used in the analysis.
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`39. Without such undisclosed information, GBT stockholders cannot evaluate for
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`themselves whether the financial analyses performed by J.P. Morgan and Centerview were based on
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`reliable inputs and assumptions or whether they were prepared with an eye toward ensuring that a
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`positive fairness opinion could be rendered in connection with the Proposed Transaction. In other
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`words, full disclosure of the omissions identified above is required to ensure that stockholders can
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`fully evaluate the extent to which J.P. Morgan’s and Centerview’s opinion and analyses should factor
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`into their decision whether to vote in favor of or against the Proposed Transaction or seek appraisal.
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`40.
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`The omission of this material information renders the statements in the “Opinion of
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`J.P. Morgan” and “Opinion of Centerview” sections of the Proxy Statement false and/or materially
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`misleading in contravention of the Exchange Act.
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`Material Omissions Concerning Centerview’s Potential Conflicts of Interest
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`41.
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`The Proxy Statement fails to disclose material information concerning the potential
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`conflicts of interest faced by Centerview.
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`COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS
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`Case 3:22-cv-05136-SK Document 1 Filed 09/09/22 Page 12 of 16
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`42.
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`The Proxy Statement sets forth:
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`In the two years prior to the date of its written opinion, Centerview was engaged to
`provide financial advisory services unrelated to the Merger to parent, including in
`connection with Parent’s acquisition of Arena Pharmaceuticals, Inc. in 2022 and
`certain other strategic matters. Centerview received between $20 million and $30
`million in aggregate compensation from Parent for work performed during such
`period.
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`Id. at 51. The Proxy Statement fails, however, to disclose the specific strategic matters that
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`Centerview has provided to Pfizer in the two years prior to the date of its written fairness opinion and
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`whether these strategic matters in any way related to a potential acquisition of GBT by Pfizer.
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`43.
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`Full disclosure of investment banker compensation and all potential conflicts is
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`required due to the significant role played by investment banks in the evaluation, exploration,
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`selection, and implementation of strategic alternatives.
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`44.
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`The omission of this material information renders the statements in the “Opinion of
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`Centerview” section of the Proxy Statement false and/or materially misleading in contravention of
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`the Exchange Act.
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`45.
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`The Individual Defendants were aware of their duty to disclose the above-referenced
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`omitted information and acted negligently (if not deliberately) in failing to include this information
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`in the Proxy Statement. Absent disclosure of the foregoing material information prior to the
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`stockholder vote on the Proposed Transaction, Plaintiff, and the other stockholders of GBT will be
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`unable to make an informed voting or appraisal decision in connection with the Proposed Transaction
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`and are thus threatened with irreparable harm warranting the injunctive relief sought herein.
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`CLAIMS FOR RELIEF
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`COUNT I
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`Claims Against All Defendants for Violations of Section 14(a) of the
`Exchange Act and Rule 14a-9 Promulgated Thereunder
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`46.
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`Plaintiff repeats all previous allegations as if set forth in full.
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`COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS
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`Case 3:22-cv-05136-SK Document 1 Filed 09/09/22 Page 13 of 16
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`47.
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`During the relevant period, defendants disseminated the false and misleading Proxy
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`Statement specified above, which failed to disclose material facts necessary to make the statements,
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`considering the circumstances under which they were made, not misleading in violation of Section
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`14(a) of the Exchange Act and SEC Rule 14a-9 promulgated thereunder.
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`48.
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`By virtue of their positions within the Company, the defendants were aware of this
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`information and of their duty to disclose this information in the Proxy Statement. The Proxy
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`Statement was prepared, reviewed, and/or disseminated by the defendants. It misrepresents and/or
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`omits material facts, including material information about the Company’s projections, the data and
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`inputs underlying the financial valuation analyses that support the fairness opinions provided by J.P.
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`Morgan and Centerview, and Centerview’s potential conflicts of interest. The defendants were at
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`least negligent in filing the Proxy Statement with these materially false and misleading statements.
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`49.
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`The omissions and false and misleading statements in the Proxy Statement are material
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`in that a reasonable stockholder would consider them important in deciding how to vote on the
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`Proposed Transaction or seek to exercise their appraisal rights.
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`50.
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`By reason of the foregoing, the defendants have violated Section 14(a) of the Exchange
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`Act and SEC Rule 14a-9(a) promulgated thereunder.
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`51.
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`Because of the false and misleading statements in the Proxy Statement, Plaintiff is
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`threatened with irreparable harm, rendering money damages inadequate. Therefore, injunctive relief
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`is appropriate to ensure defendants’ misconduct is corrected.
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`COUNT II
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`Claims Against the Individual Defendants for
`Violations of Section 20(a) of the Exchange Act
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`Plaintiff repeats all previous allegations as if set forth in full.
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`The Individual Defendants acted as controlling persons of GBT within the meaning of
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`52.
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`53.
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`Section 20(a) of the Exchange Act as alleged herein. By virtue of their positions as officers and/or
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`COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS
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`Case 3:22-cv-05136-SK Document 1 Filed 09/09/22 Page 14 of 16
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`directors of GBT, and participation in and/or awareness of the Company’s operations and/or intimate
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`knowledge of the false statements contained in the Proxy Statement filed with the SEC, they had the
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`power to influence and control and did influence and control, directly or indirectly, the decision-
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`making of the Company, including the content and dissemination of the various statements which
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`Plaintiff contends are false and misleading.
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`54.
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`Each of the Individual Defendants was provided with or had unlimited access to copies
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`of the Proxy Statement and other statements alleged by Plaintiff to be misleading prior to and/or
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`shortly after these statements were issued and had the ability to prevent the issuance of the statements
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`or cause the statements to be corrected.
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`55.
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`Each of the Individual Defendants had direct and supervisory involvement in the day-
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`to-day operations of the Company, and, therefore, is presumed to have had the power to control or
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`influence the transactions giving rise to the securities violations as alleged herein, and exercised the
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`same. The Proxy Statement at issue contains the unanimous recommendation of each of the
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`Individual Defendants to approve the Proposed Transaction. They were, thus, directly involved in
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`the making of the Proxy Statement.
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`56.
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`In addition, as the Proxy Statement sets forth at length, and as described herein, the
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`Individual Defendants were each involved in negotiating, reviewing, and approving the Proposed
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`Transaction. The Proxy Statement purports to describe the various issues and information that they
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`reviewed and considered—descriptions the Company directors had input into.
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`57.
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`By virtue of the foregoing, the Individual Defendants have violated Section 20(a) of
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`the Exchange Act.
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`58.
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`As set forth above, the Individual Defendants had the ability to exercise control over
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`and did control a person or persons who have each violated Section 14(a) and SEC Rule 14a-9,
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`promulgated thereunder, by their acts and omissions as alleged herein. By virtue of their positions as
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`Case 3:22-cv-05136-SK Document 1 Filed 09/09/22 Page 15 of 16
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`
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`controlling persons, these defendants are liable pursuant to Section 20(a) of the Exchange Act. As a
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`direct and proximate result of defendants’ conduct, GBT’s stockholders will be irreparably harmed.
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`PRAYER FOR RELIEF
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`WHEREFORE, Plaintiff demands judgment and preliminary and permanent relief, including
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`injunctive relief, in his favor on behalf of GBT, and against defendants, as follows:
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`A.
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`Preliminarily and permanently enjoining defendants and all persons acting in concert
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`with them from proceeding with, consummating, or closing the Proposed Transaction
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`and any vote on the Proposed Transaction, unless and until defendants disclose and
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`disseminate the material information identified above to GBT stockholders;
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`B.
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`In the event defendants consummate the Proposed Transaction, rescinding it and
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`setting it aside or awarding rescissory damages to Plaintiff;
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`C.
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`Declaring that defendants violated Sections 14(a) and/or 20(a) of the Exchange Act,
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`as well as SEC Rule 14a-9 promulgated thereunder;
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`D.
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`Awarding Plaintiff the costs of this action, including reason