Key Takeaways
- • Hedge funds have competed to lead a class action lawsuit challenging 3G Capital's $9.4 billion take-private acquisition of Skechers, announced in May 2025 and closed in September 2025, with minority shareholders alleging controller-driven undervaluation.
- • The Skechers complaint, filed March 16, 2026 by the Police and Fire Retirement System of the City of Detroit, alleges founders Robert and Michael Greenberg controlled approximately 60% of voting power through a dual-class structure and used that control to dictate transaction terms to their own benefit.
- • Unaffiliated shareholders were offered either $63 per share in cash or $57 in cash plus an equity unit in the post-merger private entity, with plaintiffs claiming the structure and valuation deprived minority shareholders of fair value.
- • A California federal judge refused to block the take-private deal from proceeding, though Delaware Chancery Court litigation over fiduciary duty claims and fair value continues to develop.
- • The Skechers case exemplifies elevated litigation risk in founder-led or controller-influenced take-private transactions, particularly where private equity sponsors partner with controlling shareholders in dual-class structures.
Summary
Multiple hedge funds and investment managers competed to lead a proposed class action lawsuit challenging 3G Capital's $9.4 billion acquisition of footwear retailer Skechers, which was announced in May 2025 and closed in September 2025. The litigation centers on allegations that the transaction was structured to benefit controlling shareholders at the expense of unaffiliated minority investors, with the Police and Fire Retirement System of the City of Detroit filing the lead complaint on March 16, 2026.
The core dispute involves the Greenberg family—founders Robert and Michael Greenberg—who controlled approximately 60% of Skechers' voting power through a dual-class share structure. According to the complaint, the Greenbergs leveraged their control to dictate the timing, structure, and terms of the 3G Capital transaction for their own benefit while disadvantaging minority shareholders. The transaction offered unaffiliated shareholders either $63 per share in cash or mixed consideration of $57 in cash plus an equity unit in the post-merger private entity, with plaintiffs arguing this valuation structure was unfair.
The litigation raises significant fiduciary duty questions under Delaware law, which governs take-private transactions involving controlling stockholders. The complaint alleges that minority shareholders were deprived of fair value through an allegedly inadequate sales process and conflicted transaction structure. While a California federal judge declined to block the deal from closing, the underlying Delaware Chancery Court litigation continues to develop, with the case serving as a contemporary example of how founder-led or controller-influenced take-private deals with private equity sponsors now present elevated corporate and securities litigation risk, particularly in dual-class structures.
The competitive efforts by hedge funds to lead the shareholder challenge reflect both the case's significance and the financial stakes involved in challenging billion-dollar transactions on fair value and fiduciary duty grounds.
The core dispute involves the Greenberg family—founders Robert and Michael Greenberg—who controlled approximately 60% of Skechers' voting power through a dual-class share structure. According to the complaint, the Greenbergs leveraged their control to dictate the timing, structure, and terms of the 3G Capital transaction for their own benefit while disadvantaging minority shareholders. The transaction offered unaffiliated shareholders either $63 per share in cash or mixed consideration of $57 in cash plus an equity unit in the post-merger private entity, with plaintiffs arguing this valuation structure was unfair.
The litigation raises significant fiduciary duty questions under Delaware law, which governs take-private transactions involving controlling stockholders. The complaint alleges that minority shareholders were deprived of fair value through an allegedly inadequate sales process and conflicted transaction structure. While a California federal judge declined to block the deal from closing, the underlying Delaware Chancery Court litigation continues to develop, with the case serving as a contemporary example of how founder-led or controller-influenced take-private deals with private equity sponsors now present elevated corporate and securities litigation risk, particularly in dual-class structures.
The competitive efforts by hedge funds to lead the shareholder challenge reflect both the case's significance and the financial stakes involved in challenging billion-dollar transactions on fair value and fiduciary duty grounds.
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