January 20, 2016

Study: “Merger Objection” Litigation Drops Heavily in Last Quarter of ’15

Recently, as noted in the “D&O Diary Blog,” Matthew Cain (an economist fellow for the SEC) and Professor Steven Davidoff Solomon came out with this study that analyzes preliminary statistics for takeover litigation in 2015 – lawsuits were brought in 88% of completed takeovers last year versus 95% in 2014. But the real story is reflected by the stats for the last quarter of 2015, as litigation was heavily impacted by Delaware counts stepping up to challenge “disclosure only” settlements in a slew of cases – dropping the lawsuit rate to just 21% in that quarter. Despite the higher rates of dismissals, large awards and settlements were given in litigation arising from the Rural/Metro, Dole and Freeport-McMoRan, as noted in this Dodd-Frank blog