Three Recent Delaware Decisions May Curb Plaintiff M&A Suits

The overwhelming majority of larger public company acquisition transactions are challenged by shareholder lawsuits, often in multiple jurisdictions. In 2012, for example, 96 percent of public company acquisition transactions with a value over $500 million were hit with shareholder lawsuits, with an average of 5.4 suits filed for each deal. Many of these lawsuits result in so-called “disclosure-only settlements,” where the plaintiff attorneys are paid but no cash goes to the plaintiffs. The author considers how three recent decisions from the Delaware Chancery Court are likely to affect this litigation landscape.