Fifth Third-Comerica Deal Lawsuit: Court Denies HoldCo Challenge

The lawsuit filed by activist hedge fund HoldCo Asset Management to block the Fifth Third–Comerica merger failed. On January 23, 2026, Delaware Vice Chancellor Morgan T. Zurn denied HoldCo’s emergency motion for a temporary restraining order, finding the fund had not raised a colorable claim against the deal’s protection provisions. Shareholders at both banks had already approved the combination, and the $10.9 billion merger closed on February 2, 2026.¹

Who Sued and What They Claimed

HoldCo Asset Management, a Fort Lauderdale-based activist fund with roughly $2.6 billion in regulatory assets under management, owned about 1.6 percent of Comerica’s stock when the merger was announced on October 6, 2025.²³⁴

In November 2025, HoldCo filed suit in the Delaware Court of Chancery against Comerica’s directors, with Fifth Third named as an aiding-and-abetting defendant. The complaint alleged that Comerica’s board breached its fiduciary duties by locking the company into an agreement designed to shield executives from a potential proxy contest.¹

HoldCo also attacked the post-closing compensation for Comerica CEO Curtis Farmer, calling it a “windfall.” Farmer’s package included $8.75 million in annual compensation as a Fifth Third vice chair, a $10 million cash integration payment, and $10.63 million in deferred compensation. The fund’s theory was that Fifth Third had effectively overpaid the CEO in exchange for a lower purchase price for other shareholders.⁵

The Deal-Protection Provisions Under Attack

HoldCo challenged six features of the merger agreement as “draconian” and unlawful under Delaware corporate law:

A $500 million termination fee, roughly 4.7 percent of the deal’s equity value.
A no-shop provision barring Comerica from soliciting competing offers, subject to limited fiduciary exceptions.
A force-the-vote provision requiring a prompt shareholder vote with a board recommendation for the merger.
A mandatory renegotiation clause obligating reasonable best efforts to renegotiate if shareholders rejected the deal.
A one-year outside date of October 5, 2026, to complete the transaction.
A fiduciary out that, HoldCo argued, effectively left the right to terminate for a superior proposal in Fifth Third’s hands rather than Comerica’s board.

The complaint also cited entrenchment, pointing to Farmer’s post-closing role and the placement of three Comerica directors on the Fifth Third board.¹

The Court’s Ruling

HoldCo filed its emergency motion for a temporary restraining order on January 14, 2026, eight days after the shareholder vote. Vice Chancellor Zurn denied the motion on January 23, with a written opinion following on January 26.¹

Zurn rejected the illegality theory. She found the deal protections symmetrical between the two parties and held that the fiduciary-out clause satisfied the board’s duties even without a unilateral termination right, citing Energy Partners, Ltd. v. Stone Energy Corp. The $500 million termination fee was not oppressive or unreasonable, and the one-year outside date did not strip the board of managerial authority but simply defined a timeline for what she called a “highly regulated merger.”¹

Applying the Unocal standard for defensive measures, the court found the protections neither preclusive nor coercive. The Comerica board remained free to consider unsolicited alternative proposals, and shareholders could have voted the deal down without triggering the termination fee. The 97 percent approval margin among Comerica stockholders undercut any argument of coercion.

On irreparable harm, Zurn found HoldCo’s claim that the protections were deterring rival bidders to be speculative, noting no competing offer had materialized. She wrote that “the real risk of irreparable harm is not from the consummation of the merger — it is from this motion itself,” warning that an injunction could destroy a stockholder-approved deal without producing a better one.⁶ The opinion characterized HoldCo’s arguments as turning on “unambiguous contractual language and dispositive authority.”¹

Separate disclosure claims alleging that Comerica’s registration statement was materially misleading were conceded as moot before the TRO hearing.

The Shareholder Vote

Shareholders at both banks approved the combination on January 6, 2026. Fifth Third shareholders voted 99.7 percent in favor. Comerica stockholders voted 97 percent in favor.⁷ Proxy advisor Institutional Shareholder Services had credited HoldCo’s campaign in a December 2025 report but ultimately recommended a vote in favor of the deal, pointing to Fifth Third’s institutional strength and projected cost savings.³

The separate advisory vote on Farmer’s merger-related compensation was closer: 56.7 percent in favor, 42.3 percent against, with roughly one percent abstaining. Even shareholders who supported the merger showed reservations about the executive pay package.⁸

Where the Case Stands

The denial of the temporary restraining order is the only substantive ruling in the case. As of the latest available information, the lawsuit has not been reported as dismissed with prejudice, settled, or appealed. With the merger closed and the core injunction theory rejected, any remaining claims carry limited practical significance. Among M&A practitioners, the ruling has drawn attention as a reaffirmation of Delaware’s reluctance to enjoin stockholder-approved transactions on the strength of challenges to standard deal-protection provisions.

The Underlying Merger

For readers arriving after the fact: Fifth Third Bancorp, based in Cincinnati, announced on October 6, 2025, that it would acquire Dallas-based Comerica in an all-stock transaction then valued at $10.9 billion. Comerica shareholders received 1.8663 Fifth Third shares for each Comerica share, a 20 percent premium to Comerica’s ten-day volume-weighted average price.⁹¹⁰¹¹

The transaction closed February 2, 2026. Because Fifth Third’s stock had appreciated between announcement and closing, the final value rose to approximately $12.7 billion. The combined company became the ninth-largest bank in the United States, with roughly $294 billion in assets, headquartered in Cincinnati under CEO Tim Spence.¹²¹³

1
Delaware Court of Chancery. HoldCo Opportunities Fund V, L.P. v. Angulo, C.A. No. 2025-1360-MTZ
2
PR Newswire. HoldCo Asset Management Releases Presentation
3
Banking Dive. Comerica, Fifth Third Shareholders Approve Merger; HoldCo
4
American Banker. Comerica Said No to Regions Before Fifth Third Deal
5
Banking Dive. Comerica, Fifth Third Acquisition: Spence, Farmer Compensation
6
American Banker. Judge Blesses Fifth Third-Comerica Deal, Shuts Down Lawsuit
7
Fifth Third Bancorp. Fifth Third Shareholders and Comerica Stockholders Vote to Approve Combination
8
Stock Titan. Comerica Inc. Reports Material Event
9
Fifth Third Bancorp. Fifth Third to Acquire Comerica
10
Office of the Comptroller of the Currency. Fifth Third Bank Merger Approval
11
Federal Reserve. Order Approving the Merger of Fifth Third Bancorp and Comerica Incorporated
12
Fifth Third Bancorp. Fifth Third Bancorp Quarterly Earnings Report
13
Detroit News. Fifth Third Completes Merger With Comerica