April 29, 2014

Study: 94% of Large & Small M&A Deals Involve Litigation

This 2013 Cornerstone Research study shows that 94% of large and small M&A deals involve shareholder litigation including:

– For the fourth consecutive year, shareholders filed suit in more than 90% of M&A deals valued over $100 million.

– Plaintiff attorneys filed lawsuits in 94% of all M&A deals announced in 2013 and valued over $100 million.

– For the first time, the percentage litigated among smaller deals (valued under $1 billion) and larger deals (over $1 billion) was the same.

– As in prior years, litigation for the majority of deals was resolved before the deal was closed—75% of 2013 deals.

– Of the 2013 deals resolved before the deal closed, 88% were settled, 9% withdrawn by plaintiffs, and 3% dismissed by courts.

– Lawsuits that were not settled before the deal closing remained pending for as long as four years. None of the lawsuits in the data went to trial, and all judgments (summary judgments or judgments on the pleadings) were granted to defendants.