DHT Holdings Prevails in Two Courts with Dismissal of Lawsuits Related to Rejected Offers to Acquire the Company

On June 16, 2017, Cravath secured the dismissal of a lawsuit filed against DHT Holdings, Inc., an independent crude oil tanker company, by Frontline Ltd., one of DHT’s largest shareholders, in the High Court of the Marshall Islands. The dismissal was the second secured by Cravath, following the April 2017 dismissal of an earlier lawsuit filed against DHT by Frontline in New York Supreme Court.

In March 2017, DHT agreed to acquire BW Group Limited’s VLCC (very large crude carriers) fleet for $538 million. Frontline sued DHT in New York Supreme Court alleging, among other claims, that defendants breached their fiduciary duties to DHT’s stockholders by rejecting Frontline’s unsolicited offers and erecting defensive mechanisms to prevent Frontline from making a tender offer to DHT shareholders, including through a poison pill and the dilution of Frontline’s interest through DHT’s deal with BW.

Less than 48 hours before the DHT‑BW transaction was scheduled to close, Frontline sought a temporary restraining order (“TRO”) to prevent DHT from acquiring the first of the VLCCs. Cravath partner Kevin J. Orsini successfully argued against the TRO on April 19, 2017, and persuaded the court to deny a preliminary injunction at an evidentiary hearing the next day. On April 26, 2017, Frontline filed a notice of discontinuance with the New York court, dismissing the entirety of its claims, and subsequently filed a similar suit in the High Court of the Marshall Islands where DHT is incorporated. Kevin also successfully argued against Frontline’s motion for a TRO and preliminary injunction before the High Court, which denied the motion for a preliminary injunction on June 7, 2017. Applying Delaware law, the High Court found that Frontline had failed to demonstrate irreparable harm or probable success on the merits and that the balance of equities and public interest did not favor Frontline. Frontline voluntarily dismissed its suit with prejudice on June 16, 2017. Under Marshall Islands law, the dismissal also constitutes a ruling on the merits in favor of DHT.

In addition to Kevin, the Cravath team included associates Jacqueline D. Harrington, Kyle S. Gazis, Lauren K. Ross, Peter H. Fountain and Alyssa M. Pompei. The cases are Frontline Ltd. v. DHT Holdings, Inc., et al., No. 652065/17 (N.Y. Sup.) and Frontline Ltd. v. DHT Holdings, Inc., et al., No. 17-092 (High Court of the Marshall Islands).