Fort Myers (Fla.) General Employees' Pension Fund filed a lawsuit against John J. Haley, CEO and executive director of Willis Towers Watson, and former members of the board of predecessor firm Towers Watson & Co., alleging that a few individuals benefited from the merger between Towers Watson and Willis Group Holdings PLC.
The lawsuit, filed by the $98 million pension fund in the Court of Chancery in Delaware on Tuesday, alleges a breach of fiduciary duty in relation to the merger that closed at the beginning of 2016. The suit alleges that Mr. Haley, then-Towers Watson chairman and CEO, "exclusively negotiated and pushed through the merger while poised to receive a massive and undisclosed compensation package that Willis' second-largest stockholder, ValueAct (Capital Management), offered him as Willis Towers' CEO" and that the majority of Towers Watson board members benefited from Mr. Haley's moves by receiving board seats with the merged company. The lawsuit also claims that "misleading and incomplete disclosures ... prevented Towers stockholders from casting a fully informed vote on the merger."
It is the latest lawsuit filed by a pension fund related to the controversial $18 billion merger between equals that was approved by shareholders on Dec. 11, 2015, despite opposition from some large institutional shareholders including the $231.6 billion California State Teachers' Retirement System, West Sacramento, and $209.7 billion Florida State Board of Administration, Tallahassee, which had voted against the merger.
In November 2017, the $1.1 billion Cambridge (Mass.) Retirement System filed a class-action lawsuit against Willis Towers Watson and other defendants for allegedly violating provisions of the Exchange Act in connection to the merger. That suit alleged that defendants issued false and misleading statements in proxy materials filed with the U.S. Securities and Exchange Commission prior to the merger, which closed on Jan. 4, 2016.
It its 10-K filing on Wednesday, Willis Towers Watson said it "disputes the allegations in these actions and intends to defend the lawsuits vigorously. Given the stage of the proceedings, the company is unable to provide an estimate of the reasonably possible loss or range of loss in respect of the complaints." A phone call seeking comment was referred to the filing.
Geoffrey C. Jarvis, partner at Kessler Topaz Meltzer & Check, attorney for the Fort Myers pension fund, declined comment.