Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
M&A Litigation in Delaware
Long accepted in Delaware (and in courts throughout the country), “disclosure-only” settlements were common in lawsuits brought by stockholders of a corporation sold in an M&A transaction. These lawsuits alleged that directors of the seller breached their fiduciary duties in connection with the sale price and process, and through allegedly deficient proxy materials provided to stockholders in connection with their vote on the deal. In disclosure-only settlements, the seller would agree to provide additional disclosures in advance of the stockholder vote on the transaction. As part of these settlements, all defendants typically would obtain the benefit of a broad release of liability of all claims and potential claims (not limited to disclosure claims), and the plaintiff lawyers would typically obtain a fee for obtaining a benefit for the putative class of stockholders in the form of the additional disclosures (whether helpful to stockholders or not). Many M&A participants came to view these fees as a customary “deal tax” required to be paid by the buyer as part of the transaction price.
Criticism of disclosure-only settlements from the Chancery Court has been building for years, beginning perhaps with then-Chancellor Leo E. Strine Jr.'s rejection of a proposed disclosure-only settlement in the In re Transatlantic Holdings Shareholders Litigation , C.A. 6574-CS (Feb. 28, 2013), case in 2013. More recently, decisions in Acevedo v. Aeroflex Holding, C.A. No. 9730-VCL, In re Riverbed Technology Stockholders Litigation, C.A. No. 10484-VCG (Del. Ch. Sept. 17, 2015), In re Susser Holdings Shareholder Litigation, C.A. No. 9613-VCG (Del. Ch. Sept. 15, 2015), In re Aruba Networks Stockholder Litigation, C.A. No. 10765-VCL (Transcript Ruling, Oct. 9, 2015), and In re Silicon Image Stockholders Litigation, C.A. No. 10601-VCG, reflected the Chancery Court's deep skepticism of disclosure-only settlements.
While acknowledging that Delaware law had for years permitted this very practice, these decisions questioned the propriety of allowing counsel for a single stockholder or group of stockholder plaintiffs ' who, with the promise of a significant fee award, are incentivized to reach a prompt settlement with minimal litigation expense ' to bargain away the right of absent class members to bring any claim relating to the deal. These decisions also questioned the benefit to the putative class.
This premium content is locked for Entertainment Law & Finance subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
Already a have an account? Sign In Now Log In Now
For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Removing Restrictive Covenants In New York
In Rockwell v. Despart, the New York Supreme Court, Third Department, recently revisited a recurring question: When may a landowner seek judicial removal of a covenant restricting use of her land?
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.