February 23, 2015
One Plaintiff, Dozens of Merger Objection Lawsuits, Millions in Attorneys’ Fees, Zero for Shareholders
Here’s an excerpt from this blog by Kevin LaCroix of the D&O Diary:
It is now well-established that pretty much every M&A deal attracts at least one lawsuit from a shareholder objecting to the transaction. According to research by Notre Dame business professor Matthew Cain and Ohio State law professor Steven Davidoff, 97.3% of all takeovers in 2013 with a value of over $100 million experienced at least one shareholder lawsuit. The lawsuits usually are filed almost immediately after the transaction is announced. Whether or not all of the transactions actually warrant litigation is a topic worthy of a separate blog post, but the fact is that in each case at least one shareholder is prepared to allow his or her name to be put on the lawsuit — which in turns raises the question of how it comes about that the shareholders in whose name the lawsuits are filed become plaintiffs in these cases.
The role of the named plaintiffs in these cases is an interesting one, and anyone interested in the topic will want to review Reuters reporter Tom Hals’ February 18, 2015 Special Report entitled “TV Stock Picker Leads Onslaught of Class Action Suits.” In his article, Hals take a close look at the M&A litigation blitz that has been waged in the name of Hilary Kramer, an investment newsletter author who has published a number of financial books and articles and who appears on Fox Business News.