24 02 2016

Draper Esprit, Scottish Equity Partners, and a class of former Zeus Technology investors prevail in a $34 Million Lawsuit Initiated by Riverbed Technology

After a week-long bench trial, a Covington trial team won a $34 million judgment on behalf of clients Draper Esprit, Scottish Equity Partners, and a class of former Zeus Technology investors, prevailing in a lawsuit initiated by San Francisco-based Riverbed Technology.


Draper Esprit, formerly known as DFJ Esprit LLP is a private equity and venture capital firm specializing in any stage in the lifecycle of a business from seed and series A stage, growth capital to pre-IPO investments, late stage, cross-stage investments, buyouts, PIPES, and also makes direct and secondary investments in portfolio companies. The Firm, led by Simon Christopher Cook, Stuart Malcolm Chapman, Graham Redman, Jonathan Sibilia and Brian Caulfield, is based in London. Scottish Equity Partners LLP is an investment firm specializing in direct and secondary direct investments. The firm led by Calum M. Paterson, Lorna Foy, Catherine Simpson, Stuart Paterson and Gary Le Sueur, is based in London.   The case, tried in San Francisco Superior Court, lay at the intersection of software technology and cross-border corporate deal-making.  In 2012, Riverbed bought the shares of Zeus Technology, a British software company, from funds managed by Draper Esprit and Scottish Equity Partners, along with other individual and institutional shareholders.  The deal involved an up-front price of $110 million, with $27 million to be paid as contingent earn-out consideration if the Zeus business hit certain revenue targets in the year after the acquisition.  The case revolved around whether a large source code licensing deal qualified for the earn-out under the language of the share purchase agreement.

Following trial, the court ruled in favor of the firm’s clients and awarded them $34 million, corresponding to the full amount recoverable under the contract plus interest. 

The Covington trial team was led by Clara Shin, Jeff Davidson, and Don Brown. Involved fees earner: Clara Shin - Covington & Burling; Jeffrey Davidson - Covington & Burling; Donald Brown - Covington & Burling;

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