Delaware Court of Chancery Appears to Sound the Death Knell for Disclosure-Only Settlements in Merger Litigation – January 29, 2016
Paul Hastings LLP
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Delaware, where it now might conceivably obtain more “deal certainty” via disclosure-based
settlement.
Thus, in the end, while Trulia acknowledges that too often the only purpose of merger litigation is “to
generate fees for certain lawyers who are regular players in the enterprise of routinely filing hastily
drafted complaints on behalf of stockholders on the heels of the public announcement of a deal and
settling quickly,” 13 its solutions appear to potentially impact not just the lawyers who file these
“hastily drafted complaints,” but also the defendants who are forced to litigate such cases.
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Kevin C.
Logue 1.212.318.6039 kevinlogue@paulhastings.com 1 C.A. No. 10020-CB, 2016 Del.
Ch. LEXIS 8, *60 (Del. Ch.
Jan. 22, 2016). 2 Id. at *35. 3 Id.
at *3. 4 Id. at *60. 5 Id. at *15. 6 Id.
at *27. 7 See Christopher H. McGrath, Howard M. Privette, and Christopher R.
Ramos, The Delaware Court of Chancery May Shake Up the “Sue-On-Every-Deal” Phenomenon, Orange County Business Journal, Nov. 9-15, 2015, http://paulhastings.com/docs/default-source/PDFs/the-delaware-court-of-chancery-may-shake-up-the-sue-on-everydeal-phenomenon.pdf. 8 C.A. No.
10765-VCL, at 65 (Del. Ch. Oct.
9, 2015) (TRANSCRIPT). 9 Trulia, 2016 Del. Ch. LEXIS at *25 n.29 (citing J.
Travis Laster, A Milder Prescription for the Peppercorn Settlement Problem in Merger Litigation, 93 Tex. L. Rev.
129 (2015)). 10 Of course, where expedited proceedings are granted, discovery may now be more expansive both because of a potential emphasis on damages cases and/or because such discovery could be necessary to support settlements even where “supplemental disclosures address a plainly material misrepresentation or omission.” Id. at *35. 11 Id. at *35 (emphasis added). 12 See id.
at *38 & n.48. 13 Id. at *15. Paul Hastings LLP Stay Current is published solely for the interests of friends and clients of Paul Hastings LLP and should in no way be relied upon or construed as legal advice. The views expressed in this publication reflect those of the authors and not necessarily the views of Paul Hastings.
For specific information on recent developments or particular factual situations, the opinion of legal counsel should be sought. These materials may be considered ATTORNEY ADVERTISING in some jurisdictions. Paul Hastings is a limited liability partnership. Copyright © 2016 Paul Hastings LLP. 3 .
Logue 1.212.318.6039 kevinlogue@paulhastings.com 1 C.A. No. 10020-CB, 2016 Del.
Ch. LEXIS 8, *60 (Del. Ch.
Jan. 22, 2016). 2 Id. at *35. 3 Id.
at *3. 4 Id. at *60. 5 Id. at *15. 6 Id.
at *27. 7 See Christopher H. McGrath, Howard M. Privette, and Christopher R.
Ramos, The Delaware Court of Chancery May Shake Up the “Sue-On-Every-Deal” Phenomenon, Orange County Business Journal, Nov. 9-15, 2015, http://paulhastings.com/docs/default-source/PDFs/the-delaware-court-of-chancery-may-shake-up-the-sue-on-everydeal-phenomenon.pdf. 8 C.A. No.
10765-VCL, at 65 (Del. Ch. Oct.
9, 2015) (TRANSCRIPT). 9 Trulia, 2016 Del. Ch. LEXIS at *25 n.29 (citing J.
Travis Laster, A Milder Prescription for the Peppercorn Settlement Problem in Merger Litigation, 93 Tex. L. Rev.
129 (2015)). 10 Of course, where expedited proceedings are granted, discovery may now be more expansive both because of a potential emphasis on damages cases and/or because such discovery could be necessary to support settlements even where “supplemental disclosures address a plainly material misrepresentation or omission.” Id. at *35. 11 Id. at *35 (emphasis added). 12 See id.
at *38 & n.48. 13 Id. at *15. Paul Hastings LLP Stay Current is published solely for the interests of friends and clients of Paul Hastings LLP and should in no way be relied upon or construed as legal advice. The views expressed in this publication reflect those of the authors and not necessarily the views of Paul Hastings.
For specific information on recent developments or particular factual situations, the opinion of legal counsel should be sought. These materials may be considered ATTORNEY ADVERTISING in some jurisdictions. Paul Hastings is a limited liability partnership. Copyright © 2016 Paul Hastings LLP. 3 .
