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“Will other courts give ‘disclosure only’ settlements closer scrutiny like Delaware?”

On February 15, 2017 by Schnader

Schnader’s Richard A. Barkasy and Daniel M. Pereira authored “Will other courts give ‘disclosure only’ settlements closer scrutiny like Delaware?” published in Westlaw Journal Delaware Corporate in January, 2017.

Shareholder complaints quickly followed by disclosure-only settlements have become standard operating procedure in the corporate merger context. These suits typically result in modest supplemental disclosures in exchange for a broad release of claims and attorneys’ fees for plaintiffs’ counsel.

In the 2016 case In re Trulia, Inc. Stockholder Litigation, the Delaware Chancery Court found that the supplemental disclosures were not material to the voting shareholders and declined to approve the settlement. The decision also warned that Delaware courts will disfavor disclosure-only settlements going forward and called on other courts to do the same.

Mr. Barkasy and Mr. Pereira examined Trulia as well as decisions in other courts that have followed its lead. Please click here to read the full article.