Herbert Smith Freehills Kramer secures complete dismissal of securities class action against First Horizon Corporation

On November 26, 2025, Chief Judge Renée M. Bumb of the U.S. District Court for the District of New Jersey dismissed a putative securities class action against our clients, First Horizon Corporation (First Horizon) and two of its officers, D. Bryan Jordan and Hope Dmuchowski.

The lawsuit relates to the Toronto-Dominion Bank’s (TD) attempt to acquire First Horizon in February 2022. The parties mutually agreed to terminate their merger agreement in May 2023 after TD informed First Horizon that TD did not have a timetable for regulatory approvals to be obtained for reasons unrelated to First Horizon.
First Horizon shareholders sued TD, First Horizon, and several individuals on behalf of a putative class. They asserted claims under federal securities laws based on their allegations that Defendants made misrepresentations and omissions concerning TD’s regulatory compliance and the likelihood of obtaining regulatory approval for the merger. We moved to dismiss because, among other defects, Plaintiffs failed to allege that anyone at First Horizon acted with scienter and their Section 14(a) proxy fraud claim was flawed on its face.

Chief Judge Bumb granted our motion and dismissed the claims in full. As we had argued, Judge Bumb noted that the operative complaint was full of “impermissible group pleading” and the actual scienter allegations against the First Horizon defendants were “few and far between.” The remaining allegations were nothing more than “unsupported conclusions” that were “vague and conclusory at best” or “severely weakened by the competing allegations” in the Complaint. Because none of those allegations—individually or together—came close to alleging scienter, the Court dismissed Plaintiffs’ Rule 10b-5 claims in their entirety. The Court held that Plaintiffs failed to plead causation for their Section 14(a) proxy claim. Far from alleging that they were somehow injured by the approval of the merger agreement, the Complaint alleged that the merger agreement would have benefited Plaintiffs. Based both on that fundamental defect and the fact that the merger did not close, the Court dismissed the Section 14(a) claim.

The Court “question[ed] whether Plaintiffs can – in good faith – remedy many of the deficiencies” in their pleadings, particularly given that they already had four opportunities to plead a viable claim before. But because the Court had not ruled on the sufficiency of the prior complaints, it gave Plaintiffs “one final opportunity to amend.”

The HSF Kramer team was led by Litigation and Disputes partner Brandon L. Arnold, special counsels Marjorie E. Sheldon and Jack A. Herman, and associate Thomas M. Twitchell.