RBC Capital Markets, LLC v. Jervis

RBC Capital Markets (defendant) was hired both by Rural/Metro Corporation to advise on its sale to Warburg Pincus and separately by Warburg to help arrange acquisition financing, giving RBC a financial stake in the deal closing on both sides; despite Rural's special committee expressing doubts about the adequacy of Warburg's offer, RBC lowered its own valuation analysis of Rural to make Warburg's bid appear more favorable, and just before closing RBC pursued additional buy-side financing business from other entities involved in the deal, all without disclosing these conflicts in the transaction's proxy statement. Rural shareholders (plaintiffs) sued Rural's directors for breaching their duty of loyalty and joined RBC for aiding and abetting that breach; the directors settled for $11.6 million, the trial court found RBC liable for aiding and abetting and awarded $76 million against it, and RBC appealed.