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SanDisk Sued Over M-Systems Acquisition

Two lawsuits have been filed in California, both on behalf of M-Systems shareholders regarding stock option backdating and "breaches of fiduciary duty."
STROUD, England — Two lawsuits filed have been filed against SanDisk Corp., a supplier of storage cards based on NAND flash memory, with regard to the proposed acquisition of M-Systems Ltd., SanDisk said in documents filed with the Securities and Exchange Commission Thursday (Aug. 10).

SanDisk (Milpitas) said the two suits, Dashiell versus SanDisk and Capovilla versus SanDisk, were both filed in the California Superior Court for Santa Clara County, and that each complaint purports to assert a class action claim on behalf of shareholders of M-Systems Ltd.

SanDisk proposed recently that it should buy M-Systems for about $1.35 billion.

The complaints allege that SanDisk aided and abetted M-Systems in breaches of fiduciary duties and with regard to alleged option backdating, SanDisk said in the 10-Q form. The suits complain that the takeover bid is not fair to M-Systems' shareholders and they call for it to be declared illegal, declared unenforceable, not consummated and for shareholders to get compensation.