Sonus Networks

Sonus, whose customers include some of the world’s largest wireless telecommunications carriers, engaged Manatt to help its Board negotiate with a shareholder activist, an overseas private equity fund that during the previous two years had acquired a 25 percent interest in Sonus shares. The activist sought changes in Sonus’ corporate governance policies, particularly with respect to the composition and operations of the Board. By refusing to vote at Sonus’ 2008 annual shareholders meeting and by publicizing its correspondence with Sonus and its Board, the activist created a difficult and complicated situation. In the event the activist pursued a hostile action, we first advised Sonus to adopt a shareholder rights plan, or “poison pill,” to protect its other shareholders. Second, we assisted the Board in its subsequent and successful negotiations with the activist. The process enhanced Sonus’ corporate governance policies, averted a potentially damaging shareholder disagreement, and protected all of its shareholders.