An attitude shift in shareholder litigation

Author: | Published: 23 Feb 2017

US courts have sharply amended their approach to disclosure only settlements of M&A litigation

In an article that appeared in the October 2015 issue of IFLR, I noted that while for years there had been widespread complaints about non-meritorious shareholder litigation, it still proliferated. I attributed this to the fact that nobody had an incentive to eliminate even frivolous shareholder suits. Plaintiffs' lawyers didn't want to end them because they were the way the plaintiffs' lawyers made their livings. Defense lawyers and their corporate clients didn't want to stop non-meritorious shareholder litigation because it usually could be settled on a basis that prevented anybody else from suing with regard to the transactions that were the subject of the litigation. Therefore, settling for little or no money in a lawsuit brought before anybody had an opportunity to analyse a transaction in depth was inexpensive insurance against the possibility that...


 

 

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