Hedge Funds Vie to Lead Skechers $9.4B Shareholder Suit

Hedge funds Verition Fund Management and Empyrean Capital Partners are competing to lead a proposed shareholder class action in the Delaware Chancery Court that challenges 3G Capital’s $9.4 billion acquisition of Skechers USA in May 2025. The funds contend the deal undervalued the footwear maker and that founders and directors approved unfair terms during market volatility tied to U.S. tariff announcements. Two related proceedings are pending: an appraisal action seeking a judicial determination of Skechers’ fair value and a class action alleging breaches of fiduciary duty by the company’s directors.

Verition and Empyrean say they jointly represent about $625 million of economic interest, roughly 31% of the proposed class, after building large positions in Skechers shares following the takeover announcement. That combined stake has positioned them as front-runners for the lead-plaintiff role, which would give them authority over litigation strategy, selection of counsel and settlement discussions. Rival investors, including ODS Capital and an unnamed pension fund, have objected to their appointment, arguing that pursuing both appraisal and class claims could create conflicts between different groups of shareholders.

Counsel for Verition and Empyrean have countered that their involvement in the appraisal litigation benefits the class because appraisal discovery yields internal company documents that can inform the class case. The appraisal matter is already in discovery and some investors have reached early settlements tied to that process.

Other parties seeking lead-plaintiff status include FMI Common Stock Fund, which emphasizes its representation of long-term shareholders rather than merger-arbitrage investors, and Pentwater Capital Management, which says it has a substantial financial interest while focusing solely on the class action.

The filings reflect a pattern of investors using appraisal arbitrage strategies: buying shares after a takeover announcement and seeking higher payouts in court if they believe the offered price did not reflect the company’s true value. The court must decide whether investors with overlapping claims can represent the entire class or whether separate lead plaintiffs should guide the class action, a determination that could influence settlement talks and the timing of recoveries for shareholders. Delaware courts have handled similar appraisal and fiduciary duty disputes in recent years.