One of the most significant phenomena in the world of corporate and securities litigation has been the rise of merger objection litigation. As has been well-documented, merger objection litigation reached the point in recent years that virtually every public company merger transaction drew at least one lawsuit. The circumstances surrounding merger objection litigation began to change after the Delaware courts evinced their displeasure with this kind of litigation in a series of rulings that culminated in the 2016 decision in Trulia, in which the court rejected the kind of disclosure only settlement that had characterized the resolution of these kinds of cases. Since then, the merger objection lawsuits have shifted to federal courts. Moreover, these cases, now in federal court, increasingly are not settled; rather, they are dismissed in exchange for the defendants’ willingness to pay the plaintiffs’ counsel a so-called “mootness fee.”

In a May 29, 2019 paper entitled “Mootness Fees” (here), Matthew Cain and Steven Davidoff Solomon of UC Berkley Law School, Jill Fisch of Penn Law School, and Randall Thomas of Vanderbilt Law School take a look at the recent rise of mootness fee dismissals in merger objection litigation. Their paper documents that the rise of mootness fee settlements has turned merger objection litigation into a process for a small number of lower tier plaintiffs’ firms to in effect extract a toll from companies involved in M&A transactions, largely without court scrutiny or even minimal disclosure requirements. The authors suggest a number of procedural mechanisms to try to provide some scrutiny  and transparency over these kinds of settlements.
Continue Reading Mootness Fees: The Latest in the Merger Objection Litigation Phenomenon

Priya Cherian Huskins

As I noted in prior posts, in March 2018, the U.S. Supreme Court held in the Cyan case that state courts retain concurrent jurisdiction for liability actions under the Securities Act of 1933. This development has been regarded as primarily a concern for IPO companies.  However, as discussed in the attached guest from Priya Cherian Huskins of Woodruff Sawyer, the Supreme Court’s affirmation of concurrent state court jurisdiction for ’33 Act claims may also be a concern for M&A companies as well.  A version of this article was previously published in Woodruff Sawyer’s D&O Notebook. I would like to thank Priya for her willingness to allow me to publish her article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Priya’s article.


Continue Reading Guest Post: A New Twist in M&A Litigation: Section 11 Cases in State Court

cornerstone reserach pdfAccording to the latest report from Cornerstone Research, during 2014, over 90 percent of M&A transactions resulting in at least one lawsuit, but each deal attracted a smaller average number of lawsuits and in fewer jurisdictions than in past years. The report, entitled “Shareholder Litigation Involving Acquisitions of Public Companies: Review of 2014 M&A Litigation”

gavelnewOne of the most distinctive corporate and securities litigation trend in recent years has been the surge in M&A-related litigation, with virtually every deal attracting at least one lawsuit. This trend continued again in 2014, according to a recently updated study from Matthew Cain, an economic fellow at the SEC, and University of California Berkeley law professor Steven Davidoff Solomon. As reflected their February 20, 2015 paper entitled “Takeover Litigation in 2014” (here), takeover litigation continued at a “steady state” and at an extremely high rate during 2014. Lawsuits were brought in 94.9% of takeovers in 2014 versus 39% in 2005. The 2014 figures are consistent with but slightly down from the filings in 97.3% of all takeovers in 2013.
Continue Reading Takeover Litigation Continued at Heightened Levels in 2014

gavelOne of the great litigation curses in recent times in the corporate litigation arena has been the rise of merger objection litigation. These kinds of lawsuits, which these days arise in connection with almost every M&A transaction, often are settled for nothing more than an agreement to make additional disclosures and to pay the

cornerOnly two percent of M&A lawsuit that settled in 2013 involved a monetary payment to shareholders, according to the latest report on M&A lawsuit settlements from Cornerstone Research. The report, entitled “Settlements in Shareholder Litigation Involving Mergers and Acquisitions: Review of 2013 M&A Litigation” (here), is the second part of a two-part series

cornerMergers and acquisition activity continued to attract litigation in connection with virtually every transaction during 2013, and for the first time during 2013 the litigation filing rates for smaller transactions was as great as for larger transactions, according to a study recently released by Cornerstone Research. The study, entitled “Shareholder Litigation Involving Mergers and Acquisitions:

One of the most distinctive corporate and securities litigation trend in recent years has been the surge in M&A-related litigation, with virtually every deal attracting at least one lawsuit. This trend continued again in 2013, according to a recently updated study from Notre Dame business professor Matthew Cain and Ohio State law professor Steven Davidoff.

There days, virtually every M&A transaction attracts litigation, usually involving multiple lawsuits. These cases have proven attractive to plaintiffs’ lawyers because the pressure to close the deal affords claimants leverage to extract a quick settlement, often involving an agreement to publish additional disclosures and to pay the plaintiffs’ attorneys’ fees.

As Doug Clark

One of the more vexing litigation problems to emerge recently has been the proliferation of multi-jurisdiction litigation, where corporate defendants are forced to litigate essentially the same claim in multiple courts at the same time. This problem is a particular issue in the context of M&A litigation, although not contained to those kinds of lawsuits.