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PrintA $2.03 billion judgment in a lawsuit brought by shareholders of Southern Copper Corp should be overturned because a key witness from deal adviser Goldman Sachs Group Inc was excluded from the trial, lawyers challenging the ruling argued in Delaware's Supreme Court on Thursday.
The judgment was awarded by Delaware Chancery Court Judge Leo Strine in October 2011 in a case brought by investors who accused Southern Copper of overpaying in the 2005 takeover of privately held Minera Mexico.
Goldman advised a special committee at Southern Peru Copper Corp, the predecessor of Southern Copper, that considered the acquisition. Both Southern Copper and Minera were controlled by Grupo Mexico, and Strine found that the directors of Southern Copper were coerced into vastly overpaying for Minera, which they acquired in 2005 for $3.1 billion in stock.
The Delaware Supreme Court was also asked to overturn a $304 million fee that Strine awarded to the shareholders' attorneys, which by some measures is one of the biggest fees awarded by a court in a large securities litigation case.
The one-hour hearing in Dover focused mostly on the judgment rather than the fee. Most of the argument centered on Strine's refusal to adjust the schedule to allow a Goldman Sachs banker, who is no longer at the bank, to testify at the trial.
The Goldman Sachs witness was expected to explain to the court how the Southern Copper special committee valued its own stock and that of Minera Mexico.
Goldman Sachs declined to comment.
Bruce Angiolillo, an attorney for the Grupo Mexico unit that appealed Strine's ruling, zeroed in on the drawn-out nature of the case, which was filed in 2004 before the deal was closed but only came to trial in 2011. He asked why after so much time had passed that the Chancery Court could not tweak the schedule to hear from a key witness.
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