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Santander Consumer USA

KTMC brought claims by minority stockholders of Santander Consumer USA Holdings Inc. (“SCUSA”) to challenge the take-private of SCUSA by its controlling stockholder Santander Holdings USA (“SHUSA”), which was itself controlled by Santander Bank, N.A. (“Santander”). SCUSA was primarily in the business of financing new and used auto sales in the United States.  Plaintiffs alleged that the merger was designed by Santander to capture the upside of SCUSA’s post-Covid-19 performance boom for itself, as the Company was benefitting from dual headwinds of high car prices and low auto-loan default rates as a result of pandemic aid. The take private was announced at a time when the market did not fully appreciate the positive impact the post-Covid economy was having on SCUSA and just prior to the Company’s largest quarterly earnings in its history. After Plaintiffs filed their complaint Defendants did not move to dismiss and the case proceeded into discovery and trial preparation. One week before trial, the case settled for a cash payment to the minority shareholders who were bought out in the take private transaction of $162.5 million.