merger objection lawsuits

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The number of securities class action lawsuits filed in the first six months of 2024 increased relative to the number of securities suits filed in the second half of 2023, according to a new report from Cornerstone Research. The number of suits filed in the first half of 2024 is roughly level with the historical semiannual average number of filings. The July 31, 2024, report, which is entitled “Securities Class Action Filings:2024 Midyear Assessment,” can be found here. Cornerstone Research’s July 31, 2024, press release regarding the report can be found here.Continue Reading Cornerstone Research: 1H24 Securities Suit Filings Increased Compared to 2H23

The number of securities class action lawsuit filings increased in 2023 for the first time in four years, according to a new report from NERA. According to the report, the number of filings increased more than 10% in 2023 compared to 2022. On the other hand, the number of cases resolved in 2023 declined during the year. The January 23, 2024 report, entitled “Recent Trends in Securities Class Action Litigation: 2023 Full-Year Review, can be found here.Continue Reading NERA: 2023 Fed Court Securities Suit Filings Increased for the First Time in Four Years

The number of federal court securities class action lawsuits filed during 2021 declined significantly compared to the number filed in 2020, and the number of 2021 filings was sharply below the elevated number of securities suits filed each year during the period 2017-2019. The most significant factor in the 2021 drop-off was the decline in the number of federal court merger objection class action lawsuit filings during the year, although there were other factors at work as well. Though the number of filings in 2021 declined relative to the elevated number of annual filings during period 2017-2020, the number of 2021 filings was above longer-term historical annual filings levels prior to 2017, as discussed below.
Continue Reading Securities Filings Declined in 2021 Relative to Recent Elevated Years, Closer to Long-Term Levels

Largely due to a “substantial reduction” in the number of merger objection lawsuit filings, as well as a decline in the number of Section 11 and 1933 Act securities class action filings, the number of federal and state court securities class action lawsuits filed in the first six months of 2021 “dropped considerably” compared to the second half of 2020, according to a new report from Cornerstone Research. Filings of core Section 10(b) suit filings were, however, only “down modestly.” The report, entitled “Securities Class Action Filings: 2021 Midyear Assessment,” can be found here. Cornerstone Research’s July 28, 2021 press release about the report can be found here. My own analysis of the 1H21 federal court securities class action lawsuit filings can be found here.
Continue Reading Cornerstone Research: Securities Suit Filings Declined in Year’s First Half

These days just about every public company merger transaction draws at least one merger objection lawsuit. These lawsuits formerly were filed in Delaware state court alleging violations of Delaware law, but since the 2016 Delaware Chancery Court decision in the Trulia case, in which the court expressed its distaste for this type of litigation, the lawsuits have been filed in federal court based on alleged violations of Section 14 of the Securities Exchange Act of 1934. These cases, through frequently filed, are rarely litigated. They typically are resolved by the defendants’ voluntary insertion of supplemental proxy disclosures and agreement to pay the plaintiff a “mootness” fee.

However, in a recent case a corporate defendant refused to update the proxy and succeeded in getting the case dismissed. As discussed in a recent law firm memo about the dismissal ruling, the “usual playbook” for these kinds of cases – making supplemental disclosures and paying a mootness fee – may not be the best approach, and the ruling itself may provide ammunition for companies that want to try an “alternative to the status quo.”
Continue Reading Is There an Alternative to the Status Quo on Merger Objection Lawsuits?

As most readers are aware, litigation involving objection to mergers and acquisitions transactions has been proliferating in recent years, to the point that virtually every deal draws at least one lawsuit. While many of these actions are nuisance lawsuits, they are not without their costs. Indeed, according to one recent study, the costs to defend and settle these suits are growing.
Continue Reading The Growing Costs of Merger Objection Litigation

In general, securities litigation filing trends emerge gradually and across long stretches of time. These kinds of long term trends have been the subject of a number of recent reports discussed on this site – including, for example, recent reports from NERA Economic Consulting (about which refer here), Cornerstone Research (here), as well as my own report. Though trends often become apparent only over the course of months and years, sometimes they are apparent in much shorter time frames. As it happens, the securities suit filings on a single day last week managed to neatly encapsulate all of the important current securities litigation filing trends.
Continue Reading The Sum of All Securities Litigation Filing Trends

An acquired bank’s D&O insurer’s defense cost obligation to the bank’s directors and officers in connection with merger-related litigation continued after the merger transaction closed and was owed to the acquiring bank, a federal district court judge has held, rejecting the policy-based arguments on which the insurer relied to contend that its payment obligations ceased at the time of the deal closing. District of New Jersey Judge John Michael Vazquez’s unpublished September 18, 2017 opinion containing his ruling can be found here.
Continue Reading D&O Insurer Must Continue Defense Expense Reimbursement Post-Merger

Largely as a result of the continuing upsurge in the number of federal court merger objection lawsuits, securities class action lawsuits were filed at historic levels during the first half of 2017 and well above last year’s elevated pace. Though the number of filings in this year’s second quarter were slightly  lower than in the first quarter, the total number of filings in the first six months of the year overall were on pace for the highest annual number of securities class action lawsuits since 2001.
Continue Reading First Half 2017 Securities Suit Filings Continue at Exceptional Levels