Full Opinion

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE PAUL BERGER, AS TRUSTEE FOR ) THE PAUL BERGER REVOCABLE ) TRUST and KEVIN BARNES, ) ) Plaintiffs, ) ) v. ) C.A. No. 2025-1183-BWD ) JAMES FOX, LUIS A. AGUILAR, ) GAYLE CROWELL, VALERIE ) MOSLEY, GREGORY SMITH, ) LAUREN TAYLOR WOLFE, ) BARBARA TURNER, and MORGAN ) STANLEY & CO. LLC, ) ) Defendants. ) MEMORANDUM OPINION GRANTING MOTIONS TO DISMISS Date Submitted: July 1, 2026 Date Decided: July 24, 2026 Kimberly A. Evans, Lindsay K. Faccenda, Daniel M. Baker, Robert Erikson, BLOCK & LEVITON LLP, Wilmington, DE; OF COUNSEL: Jason Leviton, BLOCK & LEVITON LLP, Boston, MA; Jeremy Friedman, David Tejtel, Alexander M. Krischik, Lindsay La Marca, FRIEDMAN OSTER & TEJTEL PLLC, Bedford Hills, NY; Attorneys for Plaintiff Paul Berger. Thomas Curry, SAXENA WHITE P.A., Wilmington, DE; OF COUNSEL: David Schwartz, David Wales, Joshua Nelson, SAXENA WHITE P.A., White Plains, NY; Adam Warden, SAXENA WHITE P.A., Boca Raton, FL; Attorneys for Plaintiff Kevin Barnes. Sabrina M. Hendershot and Miranda N. Gilbert, PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP, Wilmington, DE; OF COUNSEL: Geoffrey Chepiga, Nina Kovalenko, Marques Tracy, PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP, New York, NY; Attorneys for Defendants James Fox, Luis A. Aguilar, Gayle Crowell, Valerie Mosley, Gregory Smith, Lauren Taylor Wolfe, and Barbara Turner. Tammy L. Mercer, Amanda K. Pooler, Alberto E. Chávez, AKERMAN LLP, Wilmington, DE; OF COUNSEL: Andrew Clubok, Blair Connelly, Anthony R. Sarna, Amanda Di, LATHAM & WATKINS LLP, New York, NY; Attorneys for Defendant Morgan Stanley & Co. LLC. DAVID, V.C. The plaintiffs in this action attempt a feat of pleading by alleging, post- closing, that undisputedly independent directors breached their fiduciary duties by approving an arm’s-length merger after a months-long sales process that generated a premium to the target company’s unaffected share price. If that task sounds difficult, that is because it runs counter to the foundation of our corporation law— the business judgment rule—under which Delaware courts refuse to substitute their own judgment for the decisions of independent directors acting in good faith and with due care. To challenge the arm’s-length merger here, the plaintiffs attempt to allege that independent directors acted in bad faith by engaging a financial advisor they knew to be conflicted, then stood idly by while the advisor steered a deal to favor its preferred bidder. This theory falls apart for two independent reasons. First, the merger was approved by an overwhelming majority of fully informed, disinterested stockholders. The plaintiffs argue that the proxy issued in connection with the merger failed to disclose details about the board’s financial and legal advisors’ conflicts and the value of a competing bid, defeating Corwin cleansing. But the proxy disclosed all material information on those topics. The stockholder vote was fully informed, and Corwin extinguishes the plaintiffs’ claims. Second, even if Corwin did not apply, the complaint fails to state a claim for breach of fiduciary duty against undisputedly independent directors. An exculpation 1 provision insulates the directors from breaches of the duty of care, and the plaintiffs do not even attempt to allege that a majority of the directors who approved the merger were interested in, or lacked independence with respect to, that decision. The plaintiffs’ remaining path is to plead bad faith, a difficult standard to meet. Here, the complaint fails to adequately allege that the directors intentionally caused the proxy to omit material information, a daunting task when independent directors have no motive for intentionally withholding disclosures. Nor does the complaint adequately allege that the independent directors breached a non-exculpated duty in connection with the sales process. The plaintiffs argue that the directors breached their “Revlon duties,” but they are still limited to pleading bad faith. The plaintiffs’ attempt to second-guess the board’s decision-making fails to support an inference that independent directors acted in bad faith by intentionally failing to run a reasonable sales process. The complaint also fails to state a claim for aiding and abetting. As alleged, the financial advisor fully disclosed its relationships with all bidders, including the buyer, to the board. The complaint does not allege that the financial advisor had an incentive to favor one bidder over another, let alone that it took any action without board direction or approval, or concealed information from or otherwise misled the board. As a result, the complaint fails to identify any breach of the duty of care in which the financial advisor “knowingly participated.” 2 For these reasons, explained more fully below, the plaintiffs’ complaint is dismissed in its entirety. I. BACKGROUND1 A. Envestnet Explores A Potential Sale Of The Company But No Deal Materializes. In November 2024, funds affiliated with Bain Capital Private Equity LP (“Bain”) acquired all outstanding shares of Envestnet, Inc. (“Envestnet” or the “Company”) in an all-cash take-private merger (the “Merger”). Compl. at 1–2, ¶¶ 158–59. Prior to the Merger, Envestnet was a publicly traded Delaware corporation in the financial technology industry. Id. ¶¶ 20–21. Envestnet provided a wealth 1 The following facts are taken from the Verified Class Action Complaint (the “Complaint”) and the documents incorporated by reference therein. Verified Class Action Compl. [hereinafter Compl.], Dkt. 1; see Allen v. Encore Energy P’rs, 72 A.3d 93, 96 n.2 (Del. 2013) (“A judge may consider documents outside of the pleadings only when[] . . . the document is integral to a plaintiff’s claim and incorporated in the complaint . . . .” (citing Vanderbilt Income & Growth Assocs., L.L.C. v. Arvida/JMB Managers, Inc., 691 A.2d 609, 613 (Del. 1996))); see 8 Del. C. § 220(b)(3). Documents attached to the Transmittal Affidavit of Sabrina M. Hendershot in support of the Director Defendants’ motion to dismiss are cited as “DX __” unless otherwise defined. Transmittal Aff. of Sabrina M. Hendershot in Supp. of the Director Defs.’ Opening Br. in Supp. of Their Mot. to Dismiss Counts I and II of the Verified Class Action Compl., Dkt. 24. Documents attached to the Transmittal Affidavit of Alberto E. Chávez in support of Morgan Stanley & Co. LLC’s motion to dismiss are cited as “Chávez Aff., Ex. __”. Transmittal Aff. of Alberto E. Chávez in Supp. of Opening Br. in Supp. of Morgan Stanley & Co. LLC’s Mot. to Dismiss the Aiding and Abetting Claim in Count III of the Verified Class Action Compl., Dkt. 22. Citations to “Tr. __” refer to the transcript of the July 1, 2026 oral argument. Dkt. 53. 3 management platform using integrated technology, intelligent data, and wealth management software to financial advisors and service providers. Id. ¶ 21; DX 1 [hereinafter Proxy] at 33–34. Envestnet’s board of directors (the “Board”) comprised defendants James Fox, Luis A. Aguilar, Gayle Crowell, Valerie Mosley, Gregory Smith, Lauren Taylor Wolfe, and Barbara Turner (the “Director Defendants”). Compl. ¶¶ 12–18. In late 2019, Envestnet’s future became uncertain after the sudden death of its co-founder and Chief Executive Officer (“CEO”), Jud Bergman. Id. ¶ 28. The Board retained Goldman Sachs to conduct a strategic review process, during which the Board considered a sale of the Company or a divestiture of its Data & Analytics business (the “D&A Business”). Id. ¶¶ 23, 28. In May 2020, Bain submitted a non- binding proposal to acquire the Company for $57 to $62 per share in cash, contingent on a divestiture of the D&A Business. Id. ¶ 28. The Board was not willing to pursue a transaction contingent on a sale of the D&A Business at that time and the strategic review process did not result in a transaction. Id. ¶¶ 28, 36; Proxy at 36–37. Envestnet undertook another strategic review two years later, this time led by Piper Sandler. Compl. ¶ 29. Envestnet entered discussions with several parties, including Bain. Id. ¶ 31; Proxy at 37. Envestnet and Bain executed a nondisclosure agreement (the “2022 Bain NDA”) and explored a potential transaction until April 2022, but a deal never materialized. Compl. ¶¶ 31–32; Proxy at 37. In August 4 2022, the parties amended the 2022 Bain NDA to permit Bain to acquire additional shares of Envestnet. Compl. ¶ 33. Five months later, in January 2023, an “unnamed financial advisory firm representing the Company” (not Morgan Stanley) contacted Bain to discuss an acquisition of the Company again. Id. ¶ 34; Proxy at 37. The 2022 Bain NDA was amended to extend Bain’s standstill obligations until January 5, 2024, and Bain met with Envestnet and conducted preliminary due diligence. Compl. ¶ 35; Proxy at 37. On February 12, 2023, Bain notified the Company that it would not submit a bid because it could not offer a premium to Envestnet’s trading price. Compl. ¶ 36; Proxy at 37. B. Envestnet Begins A Sale Process For The D&A Business. Between February 13 and November 6, Envestnet’s stock price declined from $65 per share to below $35 per share, due in part to “declining revenue and volatility in [the Company’s] banking customer base.” Compl. ¶ 38 (citation omitted). At the end of 2023, the Board engaged yet another financial advisor in connection with a possible sale of the D&A Business. Proxy at 37. Bloomberg leaked that the Company had hired an advisor to solicit interest in the sale of the D&A Business, noting that “persistent deterioration in the [D&A] [B]usiness” presented a “real concern for Envestnet.” DX 6 at 1–2. 5 In January 2024, the Company announced the departure of its interim CEO, effective March 31. Compl. ¶ 41. The Board appointed Fox as interim CEO beginning April 1. Proxy at 38; see Compl. ¶ 137. The next week, Envestnet met with Bain again to discuss a potential transaction. Compl. ¶¶ 42–43; Proxy at 38. In February 2024, Envestnet formally launched a sale process for the D&A Business, which “included outreach to an affiliate of Bain,” among many other potential bidders. Compl. ¶ 44; Proxy at 38. C. Bain Submits A Proposal To Acquire Envestnet And The Company Hires Financial And Legal Advisors. On March 23, Bain submitted a non-binding proposal to acquire the Company for $62 to $64 per share in cash (“Bain’s March Proposal”). Compl. ¶ 45; Proxy at 38. Bain’s March Proposal cited Bain’s “in-depth recent evaluation” and “extensive due diligence,” including its “participation in prior sales processes” and “review of recent publicly available information,” as support for the proposal. DX 9 at 2. Bain’s March Proposal explained that Bain would finance the transaction with “a combination of equity from Bain Capital-controlled funds and third-party coinvestors, and third-party debt financing,” and expressed the “utmost confidence” that Bain could obtain the necessary financing in advance of a signing in five weeks. Compl. ¶ 45; Proxy at 38. 6 On March 27, the Board met to consider Bain’s March Proposal. Compl. ¶ 46; Proxy at 38. According to the Proxy, at that meeting, the Board instructed Fox to contact Morgan Stanley & Co. LLC (“Morgan Stanley,” and with the Director Defendants, “Defendants”), with whom the Company “had a pre-existing and unrelated engagement[,] to ask them to advise on [Bain’s March] Proposal and the Board’s review of other strategic alternatives.” Proxy at 38; Compl. ¶¶ 19, 46.2 On April 2, Morgan Stanley sent the Board a relationship disclosure (the “April 2 Disclosure”) describing its relationships with Envestnet and Bain. Compl. ¶ 48; Proxy at 38; DX 11. The April 2 Disclosure stated that in the two years prior to the disclosure, Morgan Stanley and its affiliates had earned financial advisory and financing fees of approximately $5 to $6 million from Envestnet and $35 to $40 million from Bain. Compl. ¶ 48; DX 11 at 1. The April 2 Disclosure further disclosed that Morgan Stanley was a lender to Envestnet, Bain, and Bain affiliates. Compl. ¶ 54; DX 11 at 1. In addition, the April 2 Disclosure disclosed to the Board that the prior month, Morgan Stanley had shared materials concerning an illustrative buyout analysis of the Company (the “Illustrative LBO Analysis”) with Bain: In March 2024[,] Morgan Stanley prepared written discussion materials concerning the Company, which materials, among other things, showed an illustrative leveraged buyout analysis of the Company using an assumed purchase price of $60-80 per share for the Company’s 2 Plaintiffs note that the March 27 Board meeting minutes do not mention Morgan Stanley or “any discussion of alternative advisor candidates.” Compl. ¶ 47; see DX 10 at 1. 7 common stock. The materials were prepared by Morgan Stanley in the ordinary course and were shared with two financial sponsors, one of which was Bain Capital. Morgan Stanley was and is not engaged by, or otherwise providing services to, either such financial sponsor (or any other party) in connection with the Transaction. Compl. ¶ 51; DX 11 at 2.3 On April 3, Morgan Stanley provided an updated relationship disclosure (the “April 3 Disclosure”). Compl. ¶ 61; Proxy at 39. The April 3 Disclosure further disclosed that Morgan Stanley owned “between 10% and 15% in the common stock of a publicly traded Bain Capital LP related entity,” and that it owned up to 2% of the common stock of other Bain-affiliated entities. Compl. ¶ 61. Around the same time, the Board retained the law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP (“Paul, Weiss”) as its legal counsel to advise on a potential transaction. Proxy at 39; see Compl. ¶ 56.4 The Board formally engaged Morgan Stanley to advise on Bain’s March Proposal and other strategic alternatives on April 14. Compl. ¶ 65; Proxy at 39. Morgan Stanley’s engagement letter entitled Morgan Stanley to a $3 million fee for 3 Morgan Stanley supplemented the April 2 Disclosure at least four times, on April 3, May 20, June 18, and July 10. Compl. ¶¶ 61, 96, 108, 126; Proxy at 39, 43, 45, 49. 4 The Company retained Paul, Weiss in April but did not execute an engagement letter until July 10, the day before the Merger was approved. See Compl. ¶ 57. 8 rendering a fairness opinion and an additional fee equal to 1.1% of the deal value upon consummation of a transaction. Compl. ¶ 66. D. Envestnet Receives Unsolicited Acquisition Proposals From FNZ And GTCR. On April 16, Reuters published an article reporting that after receiving interest from private equity firms, including Bain, Envestnet was exploring strategic alternatives that could include a potential sale of the Company. Id. ¶ 70; Proxy at 39. The next day, the Board met again to discuss Bain’s March Proposal. Management presented preliminary draft long-range projections for the fiscal years 2024 through 2028, and Morgan Stanley presented preliminary analyses, including a discounted cash flow (“DCF”) analysis, based on the draft projections. Compl. ¶ 73; Proxy at 39. Morgan Stanley’s DCF analysis implied a value range of approximately $60.75 to $77.00 per share using a 3% growth rate (with a midpoint of $68.88 per share), $63.50 to $80.50 per share using a 4% growth rate (with a midpoint of $72.00 per share), and $66.50 to $84.00 per share using a 5% growth rate (with a midpoint of $75.25 per share). Compl. ¶ 73; DX 13 at 48–50. Morgan Stanley also identified fourteen potential strategic counterparties and ten potential financial sponsors. Proxy at 40; DX 13 at 1–2. The Board directed Morgan Stanley to encourage Bain to improve its March Proposal and to offer incremental diligence materials. Proxy at 40; Compl. ¶ 74. The Board also directed Company management to continue to develop the projections. Proxy at 40; Compl. ¶ 74. 9 On April 18, Envestnet and Bain entered into a new nondisclosure agreement (the “2024 Bain NDA”). Compl. ¶ 75. On April 26, private equity firm GTCR LLC (“GTCR”) submitted an unsolicited non-binding proposal to acquire the Company for $70 to $75 per share in cash (“GTCR’s April Proposal”). Id. ¶ 76; Proxy at 40. GTCR’s April Proposal stated that GTCR “expected it would need to raise third-party debt financing to finance the transaction consideration” and “was prepared to move expeditiously.” Proxy at 40; Compl. ¶ 76. The next day, strategic party FNZ Group (“FNZ”) submitted another unsolicited non-binding proposal to acquire the Company for $67 to $71 per share in cash (“FNZ’s April Proposal”). Compl. ¶ 77; Proxy at 40. FNZ, which had a strategic partnership with the Company to distribute its wealth data platform internationally, stated that FNZ’s April Proposal was “not subject to any financing contingencies” and it expected that a transaction could be signed within 30 to 45 days. Compl. ¶ 77; Proxy at 40–41. The Board met on April 29 to discuss the proposals. Compl. ¶ 78. “The Board discussed the fact that the [two] proposals offered higher prices for the Company than [Bain’s March] Proposal and also discussed that neither of the [two] proposals had yet identified or secured financing partners to complete a transaction.” Proxy at 41; DX 16 [hereinafter April 29 Minutes] at 2. The Board considered “whether either [FNZ] or [GTCR] had the financial capability to potentially acquire the 10 Company without committed debt or equity financing,” “the importance of fully committed financing at signing,” and “that each [b]idder’s ability to secure financing directly related to deal certainty.” April 29 Minutes at 3. The Board also considered that a transaction with GTCR or FNZ posed a greater risk of regulatory delay than a transaction with Bain. Id. at 2–3. The Board set a May 20 deadline for GTCR and FNZ to submit financing proposals. Compl. ¶ 79; April 29 Minutes at 4. In the days following, the Company entered into nondisclosure agreements with GTCR and FNZ and provided each bidder with access to Envestnet’s virtual data room. Compl. ¶ 82. On May 8, the Board held a meeting at which management presented revised projections “based on management’s 2024 annual financial plan.” Id. ¶ 87. The Board also received an update on the D&A Business sale process, in which, following outreach to more than 80 bidders, four bidders remained in discussions with the Company. DX 8 at 2–3. Preliminary proposals for the D&A Business ranged from $250 million to $325 million. Id. E. GTCR, Bain, And FNZ Submit Revised Proposals. On May 20, GTCR submitted a revised non-binding proposal to acquire the Company for $72.50 per share in cash (“GTCR’s May Proposal”). Compl. ¶ 88. GTCR’s May Proposal stated that GTCR had obtained equity commitments from GTCR-affiliated funds and third-party co-investors and secured debt financing 11 through signed debt commitment letters from Barclays Bank PLC, JPMorgan Chase Bank, N.A., and Wells Fargo Bank. Id. ¶ 91. GTCR’s May Proposal further stated that GTCR “expect[ed] to complete diligence within three weeks.” Id.; DX 17 at 25. The same day, Bain submitted a revised non-binding proposal to acquire the Company for $67.50 per share in cash (“Bain’s May Proposal”). Compl. ¶ 88. Bain’s May Proposal reiterated that Bain would fund the purchase price with equity from Bain funds and third-party co-investors and third-party debt financing. DX 17 at 17; see Compl. ¶ 89. Bain again expressed the “utmost confidence in [its] ability to provide financing commitments” and sought permission to contact four banks, six direct lenders, eleven limited partners, and four strategic investors for additional financing. DX 17 at 17; Compl. ¶ 89. Bain’s May Proposal indicated that Bain could sign a deal within two to three weeks. DX 17 at 16; Compl. ¶ 89. Morgan Stanley also provided an updated relationship disclosure on May 20 (the “May 20 Disclosure”). Compl. ¶ 96; see Proxy at 43. The May 20 Disclosure stated that in the two years prior to the disclosure, Morgan Stanley and its affiliates had received $40 to $50 million in fees from Bain, an increase from the $35 to $40 million in fees identified in the April 2 Disclosure. Compl. ¶ 96. It also stated that in the two years prior to the disclosure, Morgan Stanley and its affiliates had received $40 to $50 million in fees from GTCR and its affiliates, and that a member of 12 Morgan Stanley’s senior deal team was a member of FNZ’s coverage team. Chávez Aff., Ex. K at 1–2. The next day, May 21, FNZ submitted a revised non-binding proposal to acquire the Company for $71 per share in cash (“FNZ’s May Proposal”). Compl. ¶ 88. FNZ’s May Proposal enclosed a signed debt commitment letter for approximately $4.5 billion and preferred equity support letters for approximately $2.9 billion. Id. ¶ 90. FNZ’s May Proposal stated that FNZ would use $2.1 billion of committed financing to refinance its own debt, its proposal would “not be conditional on obtaining financing,” and expressed a desire to sign within four weeks. Id. When the Board and its advisors met to review the revised proposals,5 Morgan Stanley expressed its belief that GTCR’s and FNZ’s proposals offered more cash per share than Bain’s because GTCR and FNZ “likely expected to achieve significant business-operation synergies” following the merger. Compl. ¶ 92. But Morgan Stanley also noted that “Bain was likely to be able to complete its diligence on an expeditious timeline.” Id. The Board asked questions about the structure of FNZ’s May Proposal, which sought to finance the entire transaction with debt and preferred equity, and Morgan Stanley said it would seek clarity on FNZ’s financing 5 Minutes before the Board’s May 23 meeting, Bloomberg reported that Envestnet was drawing interest from potential buyers, including GTCR. DX 18. 13 structure. DX 17 at 3. The Board set a June 19 deadline to complete diligence, secure financing, and submit final bids. Compl. ¶ 93. The Board also agreed to permit the bidders to contact a limited number of bona fide financing sources. Id. Days later, the Board met again to discuss the sales process. Id. ¶ 94. The Board discussed that “widespread news reports [of a potential transaction] may have reduced, perhaps significantly, the additional value of undertaking a pre-signing market check or go-shop as compared to situations without such press coverage.” DX 14 at 2. The Board also considered “strong feedback” from FNZ and Bain rejecting a go-shop provision in their mark-ups of a draft merger agreement. Id. “Weighing those factors, the Board determined that provided that a relatively low (below 3%) termination fee could be agreed to be paid by the Company in the event that a bidder wanted to acquire the Company following the signing of a merger agreement, there would be sufficient opportunity for any bidders that had not decided to approach the Company following the news coverage to emerge.” Id. Paul, Weiss gave an updated regulatory analysis in which it advised that a transaction with Bain or FNZ “posed little to no antitrust risk and that such a transaction would very likely receive regulatory clearance,” while a transaction with GTCR “had a greater likelihood of an extended investigation.” DX 14 at 2–3. 14 F. GTCR Withdraws From The Bidding Process. On June 12, GTCR sent a letter to the Board stating that GTCR would not be in a position to submit a revised proposal by the June 19 deadline due to “limited access to Company data and management.” Compl. ¶ 97. GTCR stated that “[s]hould these circumstances change materially,” GTCR would be “pleased to discuss re-engaging to complete [its] diligence and submit a binding proposal to acquire the Company.” DX 19 [hereinafter June 14 Minutes] at 7. But when Morgan Stanley contacted GTCR the next day to discuss its concerns, GTCR declined to re- engage and reiterated its intent to exit the process. Compl. ¶¶ 99–100. When the Board met to discuss GTCR’s June 12 letter, Representatives of Morgan Stanley, with input from representatives of Paul, Weiss, . . . reviewed in detail the amount of information and access to members of Company management that had been provided to [GTCR] in comparison to [Bain] and [FNZ], noting that [GTCR] had been provided substantially similar access to Company management as [Bain] and [FNZ] and that [GTCR] had been given appropriate access to the virtual data room for diligence purposes. June 14 Minutes at 2; see Compl. ¶ 100. Morgan Stanley told the Board that GTCR “had cancelled several hours of meetings with Company management” prior to June 12, and GTCR “had not responded to offers from . . . Morgan Stanley to schedule . . . additional calls with members of Company management.” June 14 Minutes at 2. The Board discussed possible reasons for GTCR’s exit from the process, as well as the benefits and risks of further outreach to GTCR or an extension 15 of the June 19 deadline. Compl. ¶ 100; June 14 Minutes at 2. The Board decided to continue discussions with Bain and FNZ consistent with the June 19 deadline. June 14 Minutes at 2; see Compl. ¶ 100. The Board also directed Paul, Weiss to communicate with GTCR to better understand its concerns and to encourage GTCR to submit a final proposal by June 19. June 14 Minutes at 3. On June 16 and 17, the Company informed GTCR, FNZ, and Bain that updated proposals to acquire the D&A Business reflected a value of between $100 million and $220 million, significantly less than preliminary proposals for between $250 million and $325 million. Proxy at 42, 45; Compl. ¶ 101. G. Bain Submits Another Proposal. On June 18, FNZ informed the Company that it had not secured financing to submit a final proposal by June 19, and that, while “it may be able to submit a revised proposal,” it “would require at least several additional weeks to secure the necessary financing.” Proxy at 45; see Compl. ¶¶ 102–03. On June 19, Bain submitted a proposal to acquire the Company for $62.75 per share in cash, plus a cash amount equal to any consideration received by the Company for the sale of the D&A Business if the divestiture was completed by closing (“Bain’s June Proposal”). Compl. ¶ 105. Bain’s June Proposal was not contingent on a sale of the D&A Business, and stated that the purchase price would be funded with $1.8 billion from Bain-advised funds, third-party co-investors, and 16 strategic partners, plus committed debt and preferred equity. Proxy at 45. Bain’s June Proposal stated that Bain had completed diligence and obtained internal approvals, and was prepared to sign a deal within one week. Id. at 45–46. Over the next two days, the Board met to consider Bain’s June Proposal and the D&A Business sale process. DX 20–21; see Compl. ¶¶ 106, 111. The Board and its advisors concluded that Bain likely decreased its offer due to lower valuations received for the D&A Business. DX 21 at 2. The Board reviewed an updated relationship disclosure that Morgan Stanley delivered on June 18 (the “June 18 Disclosure”), which disclosed that Morgan Stanley had received $15 to $30 million in fees from GTCR in the two years prior to the disclosure, down from $40 to $50 million in the May 20 Disclosure. Compl. ¶ 108; Chávez Aff., Exs. K–L. The June 18 Disclosure also disclosed $30 to $50 million in fees from Bain, down from $40 to $50 million in the May 20 Disclosure. Compl. ¶ 108; Chávez Aff., Exs. K–L. Morgan Stanley presented the Board with a revised DCF analysis yielding a valuation range of $60.75 to $76.50 per share, with a midpoint of $68.63. Compl. ¶ 112. The Board agreed to reconvene after the weekend to allow time for an additional bid from FNZ, but also instructed Morgan Stanley to counter Bain’s June Proposal at $64 per share, confirm that the deal would not be conditioned on a sale of the D&A Business, and ensure Bain would have committed financing at signing. DX 20 at 4. 17 H. FNZ Submits Another Proposal, GTCR Confirms It Is Out, And The Board Counters Bain’s June Proposal. On June 21, FNZ told Fox that it would submit a proposal to acquire the Company the following day. Compl. ¶ 114. The next day, FNZ submitted a revised proposal to acquire the Company for $70 per share in cash (“FNZ’s June Proposal”). Id. ¶ 115. FNZ’s June Proposal asked for three to four weeks to secure financing and an exclusivity period of up to four weeks. DX 22 at 7–8. FNZ’s June Proposal proposed a rollover in which BlackRock, a substantial Envestnet stockholder, would exchange its Envestnet shares for FNZ shares and an additional equity commitment. Compl. ¶ 115. Although BlackRock agreed to “evaluate” a rollover, it had not committed to one. DX 22 at 6–7. FNZ’s June Proposal was also contingent on the sale of the D&A Business and contemplated that proceeds from the sale would be distributed to Envestnet stockholders. Compl. ¶ 115. FNZ’s June Proposal stated that FNZ valued its proposal at approximately $72 to $73 per share, assuming the divestiture of the D&A Business yielded proceeds of $100 million to $160 million. Id. On Monday, June 24, the Board reconvened to discuss the sales process. Id. ¶ 116. Morgan Stanley reported that FNZ’s financial advisor had asked for feedback on FNZ’s June Proposal and Morgan Stanley relayed concerns about FNZ’s financing. Id. FNZ’s advisor told Morgan Stanley that FNZ was attempting to secure financing commitments but had not yet done so. DX 22 at 2. The Board 18 agreed that it would require fully committed financing at signing, and also considered that FNZ’s June Proposal was contingent on the sale of the D&A Business, “introducing closing risks not present in the [Bain] proposal.” Id. In addition, Fox told the Board that he had spoken with a representative at GTCR, who told him GTCR would not be able to make another offer for the Company in the near term and that it had gotten “ahead of [its] skis” when it made its earlier proposals. Id. Morgan Stanley also reported that it tried to connect with GTCR on multiple occasions but had not heard back. Id. In weighing the viability of a transaction with FNZ or GTCR, the Board considered that Bain “had been consistent, straightforward and timely in its proposals.” Id. Morgan Stanley informed the Board that Bain’s valuation of the Company had in fact been affected by the recent proposals for the D&A Business, and while Bain’s June Proposal was not contingent on a sale of the D&A Business, Bain expected consent rights over the sale of the D&A Business prior to closing. Compl. ¶ 116. The Board again considered whether it should extend the transaction timeline to accommodate FNZ’s attempt to secure financing, but concluded that even if FNZ were to obtain financing, its offer was contingent on a sale of the D&A Business, which was uncertain. DX 22 at 3; see Compl. ¶ 117. The Board also discussed that 19 media reports surrounding the Company’s process created uncertainty for employees, business partners, and customers. DX 22 at 3. The Board then discussed the Company’s standalone prospects and Morgan Stanley’s “advice and financial analyses.” Id. The Board concluded that “the amount and certainty of Bain’s offer was likely to provide greater value to the Company’s shareholders” than the Company’s standalone plan when considering the execution risk associated with Envestnet’s turnaround plans and the potential that the D&A Business may realize a lower-than-expected transaction value. Id. The Board again directed Morgan Stanley to attempt to negotiate a price increase from Bain. Id.; see Compl. ¶ 118. I. The Board Accepts Bain’s “Best And Final” Proposal. On June 25, Bain provided Morgan Stanley with a “best and final” offer to acquire the Company for $63.15 per share in cash, conditioned on exclusivity through July 10 (the “Final Bain Proposal”). Compl. ¶ 120; Proxy at 48. The Board met to consider the Final Bain Proposal the same day. Id. ¶ 121. At the meeting, Morgan Stanley informed the Board that GTCR had reaffirmed that it would not submit another proposal. DX 15 at 2. Morgan Stanley and Paul, Weiss further informed the Board that FNZ would require additional weeks to arrange committed financing and could not provide a definite response regarding its expected financing sources. Id. 20 The Board considered whether to attempt to solicit revised bids from GTCR or FNZ but concluded that neither bidder had demonstrated the same level of interest in the Company as Bain. Id. The Board noted that it had already pushed Bain on price, waiting on a revised proposal from FNZ risked jeopardizing a transaction with Bain, and a transaction with FNZ was still conditioned on a sale of the D&A Business. Id. After concluding that further efforts to extract price increases from Bain were unlikely to be successful, the Board determined to accept the Final Bain Proposal and grant Bain limited exclusivity through July 10. Id. at 2–3. Beginning on June 26, Envestnet and Bain exchanged drafts of a merger agreement (the “Merger Agreement”). Compl. ¶ 122. On July 9, the Board held a meeting at which it received an update on negotiations and a presentation from Morgan Stanley on valuation. Id. ¶ 124. Morgan Stanley’s presentation showed that Bain’s $63.15 per share offer represented a 4.8% discount to the Company’s 52- week share price high of $66.31, but an 11.7% premium to the unaffected share price of $56.54 and a 12.1% premium to the unaffected 30-day volume-weighted average share price of $56.35. Id.; DX 23 at 34. On July 10, Morgan Stanley provided another relationship disclosure (the “July 10 Disclosure”), which disclosed: Morgan Stanley is mandated on a large number of advisory and financing assignments for certain Bain Related Entities . . . , in each 21 case unrelated to the Transaction, for which we would expect to receive customary fees if such transactions are completed. We expect that such fees from the Bain Related Entities would be significantly more, in the aggregate, than the fees Morgan Stanley would receive from the Company in the Transaction. Compl. ¶ 126; Proxy at 49. On July 11, the Board met again and discussed the July 10 Disclosure, concluding that the relationships disclosed therein “would not interfere with Morgan Stanley’s ability to provide advisory services or render a fairness opinion to the Board.” Compl. ¶ 128. Morgan Stanley subsequently provided an updated valuation presentation and fairness opinion to the Board. Id. ¶ 129. Following Morgan Stanley’s presentation, the Board unanimously approved entry into the Merger Agreement. Id. ¶ 132. The Board also authorized a $900,000 discretionary cash bonus to Fox for his work on the transaction. Id. Later that day, the Company publicly announced the Merger. Id. ¶ 133. J. Envestnet Stockholders Approve The Transaction. On August 23, 2024, Envestnet filed a definitive proxy statement (the “Proxy”) with the Securities and Exchange Commission in connection with the Merger. Id. ¶ 151. With respect to Morgan Stanley’s fee, the Proxy disclosed: Envestnet has agreed to pay Morgan Stanley for its services in connection with the Merger an aggregate fee, a significant portion of which is contingent upon the closing of the Merger, which is estimated, as of the date of this Proxy Statement, to be approximately $50 million (which we refer to as the “Morgan Stanley Transaction Fee”), $3 million of which was payable upon the rendering of a financial opinion 22 to the Board, which will be credited against the Morgan Stanley Transaction Fee payable if the Merger is consummated. Proxy at 65. With respect to prior fees Morgan Stanley had earned from Envestnet and Bain, the Proxy disclosed: In the two years prior to the date of Morgan Stanley’s opinion, Morgan Stanley and its affiliates provided financial advisory and financing services to Envestnet and received aggregate fees of approximately between $5 million and $6 million for such services. In the two years prior to the date of Morgan Stanley’s opinion, Morgan Stanley and its affiliates . . . provided financial advisory and financing services for the Bain Related Entities and received aggregate fees of approximately between $30 million and $50 million for such services . . . . Id. As for Morgan Stanley’s current engagements with Bain, the Proxy stated: As of the date of Morgan Stanley’s opinion, Morgan Stanley has been engaged for certain financial advisory services for Bain Related Entities . . . , in each case unrelated to the Merger, for which Morgan Stanley expects to receive customary fees if such transactions are completed. Morgan Stanley expects that such fees from the Bain Related Entities would be significantly more, in the aggregate, than the fees Morgan Stanley would receive from Envestnet in the Merger. Id. at 66. On September 24, 75.3% of all Envestnet shares outstanding and entitled to vote, excluding shares held by the Company’s directors and officers, voted to approve the Merger. Compl. ¶ 158; The Director Defs.’ Opening Br. in Supp. of Their Mot. to Dismiss Counts I and II of the Verified Class Action Compl. [hereinafter OB] at 27, Dkt. 23. The Merger closed on November 25. Compl. ¶ 159. 23 Nearly a year after the Board approved the Merger with Bain, on June 25, 2025, the post-Merger Company announced an agreement to sell the D&A Business to private equity firm STG for an undisclosed sum. DX 26 at 1.