Recent Delaware Court of Chancery opinions suggest financial
advisers and corporate officers working on mergers will be
subjected to an all-encompassing review of conflict disclosure
as well as the remedial actions taken to protect against
If they fall short, injunctions are not expected to provide
much of a solution for shareholders.
When controversial conflicts arise and open the door to
potential shareholder litigation, financial advisers might heed
the warnings of chancellor opinions in El Paso Corporation
shareholder litigation and Del Monte Foods Company shareholder
litigation and decide to drop-out of deals.
"I don't think you should automatically jump to the
conclusion that you have to withdraw, but I think you have to
have robust disclosure not with the company but with the
board," said Kevin Genirs, a managing director and attorney in
the investment banking division of Barclays in New York.
"To me, that's the important takeaway...