In recent years, one of the curses of the corporate and securities litigation world has been the ubiquitous filing of merger objection lawsuits in connection with proposed M&A transactions. When a deal is announced, plaintiffs’ lawyers almost always file one or more of these suits in which they seek additional proxy disclosures. After the defendant company agrees to make additional disclosures, the plaintiffs’ lawyers dismiss the suits in exchange for the payment of a so-called “mootness fee.” It is a process that the well-respected jurist Richard Posner famously described as “no better than a racket.”

Now, in a recent decision written by Judge Frank Easterbrook, the Seventh Circuit has identified additional tools and ammunition that companies and other objectors can use to try to fight these kinds of lawsuits —  which, the appellate court specially recognized, have no purpose other than to transfer money from companies to plaintiffs’ lawyers.Continue Reading Will the Seventh Circuit’s Recent Opinion Deter Merger Objection Lawsuits?