WASHINGTON — Amazon is seeking to dismiss a shareholder lawsuit filed in August that alleged that the company’s board of directors acted in bad faith when it awarded Project Kuiper launch contracts to Arianespace, Blue Origin and United Launch Alliance.
In a filing with Delaware’s Court of Chancery Dec. 11, Amazon said a suit filed in August by a Cleveland-based pension fund that is a company shareholder failed to provide the “extreme set of facts” required by law to show Amazon’s board improperly approved the launch contracts while overlooking SpaceX.
The lawsuit claimed that the board performed little diligence on the proposed contracts to launch the 3,236-satellite constellation with the Ariane 6, New Glenn and Vulcan Centaur rockets. The combined contracts were, it stated, the second largest capital expenditure in Amazon’s history at the time, trailing only its $13.7 billion acquisition of grocer Whole Foods.
The lawsuit stated that the board and its audit committee spent “barely an hour” reviewing those contracts, including those that would go to Blue Origin and ULA. Blue Origin is owned by Amazon founder and former chief executive Jeff Bezos, while ULA has a contract with Blue Origin to use BE-4 engines on its Vulcan rocket. The suit estimated that nearly 45% of the value of the contracts goes to Blue Origin either directly or through the BE-4 engine contract with ULA.
“Here, the pleaded facts show the opposite — that the directors undertook a diligent and informed review of the agreements,” Amazon stated. That included meeting for hours to discuss Project Kuiper in general and the proposed launch contracts specifically and “having a full board discussion” before approving those contracts.
“The complaint likewise fails to plead particularized facts showing that Bezos was improperly involved in the negotiation of the contracts or sidelined SpaceX, let alone that the directors deliberately ignored signs of…
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