Background
This consolidated class action challenges the take-private acquisition of WideOpenWest, Inc. (“WOW”) by its controlling stockholder, Crestview Advisors, L.L.C., and DigitalBridge Investments, LLC. WOW’s board approved the merger on August 11, 2025, and it closed on December 31. Multiple putative class actions followed, alleging that Crestview and certain WOW directors and an officer breached fiduciary duties by approving the merger through an unfair process and at an unfair price. The Court consolidated the actions on September 11, 2026.
Two factions competed for appointment as lead plaintiff and lead counsel. The LBP Faction consisted of LB Partners LLC (“LBP”) and ODS Capital LLC (“ODS”) as proposed lead plaintiffs, with Bernstein Litowitz Berger & Grossmann LLP and Block & Leviton LLP as co-lead counsel, and Labaton Keller Sucharow LLP and Friedman & Tejtel PLLC as additional counsel. The Turk Faction consisted of Matthew Turk as proposed lead plaintiff, with Prickett, Jones & Elliott, P.A., Kessler Topaz Meltzer & Check, LLP, and Johnson Van Kwawegen LLP as co-lead counsel. The Court held a hearing on October 19, 2026.
The Court’s Holding
Vice Chancellor Cook granted the LBP Faction’s motion and appointed LBP and ODS as lead plaintiffs, with Bernstein Litowitz and Block & Leviton as co-lead counsel. The Court applied the Hirt factors codified in Court of Chancery Rule 23(d)(4)(A), which include counsel’s competence, resources, quality of the pleading, performance to date, leadership structure, relative economic stakes, conflicts, and other pertinent matters.
The Court found factors (iii) quality of the pleadings, (iv) counsel’s performance, and (v) leadership structure neutral between the factions. Both sides pursued Section 220 books-and-records investigations, and neither faced significant dispositive motion risk. The Court rejected the Turk Faction’s criticism of the LBP Faction’s structure, noting the LBP Faction proposed a two-firm leadership, not six firms as characterized.
Regarding factor (vi), relative economic stakes, the Court found both sides had substantial absolute and relative stakes sufficient to avoid “economically rational apathy.” LBP held 3,888,326 shares representing $20.2 million in merger consideration (approximately 7% of unaffiliated float and 17% of LBP’s reported securities), while Turk owned 900,000 shares representing $4.5 million (approximately 20% of his portfolio). Although LBP’s stake was larger, the Court concluded this factor was “a wash” because both stakes were sufficiently substantial to incentivize monitoring.
With the Hirt factors neutral, the Court considered additional characteristics of the proposed lead plaintiffs as a tiebreaker. LBP disclosed it was a sophisticated fund founded by Charles Pollard Cocke, Jr., who previously worked at the University of Virginia Investment Management Company and co-founded Investure LLC, building it into an organization managing approximately $14 billion for nonprofit endowments. LBP also served as Cocke’s family investment office. In contrast, Turk did not file an affidavit or explain his background in the briefing; only at the hearing did counsel state Turk was an individual investing for himself and his wife. The Court concluded that LBP’s institutional sophistication and experience managing third-party capital, including university endowments, provided advantages in monitoring counsel and lent legitimacy to the class action.
The Court rejected the Turk Faction’s argument that LBP’s sale of 43% of its WOW stake between signing and closing disqualified it, noting LBP explained this as portfolio rebalancing. The Court also noted that Turk had sold shares during the same period—a fact disclosed only on the eve of the hearing—undermining the criticism.
Key Takeaways
- When Hirt factors are neutral between competing lead plaintiff applicants, courts may consider additional characteristics such as the plaintiff’s sophistication, fiduciary experience, and ability to monitor counsel.
- Institutional investors with experience managing third-party capital may have an advantage over individual investors when the statutory factors are otherwise equal.
- Pre-litigation stock sales by a proposed lead plaintiff do not necessarily disqualify them, particularly where the sales reflect portfolio rebalancing and the opposing faction engaged in similar conduct.
- Proposed lead plaintiffs should disclose their backgrounds and stockholdings affirmatively; failure to do so may disadvantage their application when the court must choose between otherwise qualified candidates.
Why It Matters
This decision illustrates how Delaware courts resolve close lead plaintiff contests when the traditional Hirt factors do not clearly favor one side. By emphasizing the “additional characteristics” prong, the Court signaled that institutional sophistication and transparency about one’s background can tip the balance. The ruling also provides practical guidance on the weight given to pre-litigation trading activity, suggesting that portfolio management decisions will not automatically disqualify institutional investors absent evidence of improper motive or unique litigation risk.