May 19, 2016

Will Disclosure-Only Settlements in Merger Objection Suits Live On Outside Delaware?

Here’s the intro from this blog by Kevin LaCroix:

When Delaware Chancellor Andre Bouchard rejected the proposed disclosure-only settlement in the litigation arising out of Zillow’s acquisition of Trulia, there was some belief that his decision represented the death knell for these kinds of settlements in merger objection lawsuits. There is indeed some evidence that the number of merger objection lawsuits filed has declined. However, as discussed in a Washington Legal Foundation article by attorneys Anthony Rickey and Keola R. Whittaker, “Delaware’s sister courts continue to approved disclosure only settlements and award six-figure attorneys’ fees.” As discussed below, the net effect of Delaware’s hostility to disclosure only settlements may not necessarily be that fewer of these kinds of cases get filed, it may be that weaker cases are “driven to other jurisdictions.”