IBM-HashiCorp: Shareholder lawsuit seeks to derail $6.4 billion acquisition

However, Graff’s lawsuit suggests a different narrative. The complaint, filed Monday with the US District Court for the Northern District of California, names several key figures on HashiCorp’s board, including CEO Dave McJannet and CTO Armon Dadgar, and other executives, accusing them of structuring the deal to secure personal financial benefits. According to the lawsuit, these insiders hold substantial amounts of illiquid stock, which will convert to cash or liquid shares, providing them with significant financial windfalls.

“Company insiders currently own large, illiquid portions of Company stock, Company options, and Company Restricted Stock Units, all of which will be exchanged for the merger consideration upon the consummation of the Proposed Transaction, not shared amongst Plaintiff and other public stockholders of the Company,” the complaint said. For example, McJannet is reported to hold $270 million in stock, options and restricted stock units, while Dadgar’s holdings are valued at $646 million, the lawsuit mentioned.

“The breakdown of the benefits of the deal indicates that HashiCorp insiders are the primary beneficiaries of the Proposed Transaction, not the Company’s public stockholders such as Plaintiff,” the complaint said. “The Board and the Company’s executive officers are conflicted because they will have secured unique benefits for themselves from the Proposed Transaction not available to Plaintiff as a public stockholder of HashiCorp.”