Stockholder challenges to large corporate mergers and acquisitions are now commonplace. In 2014, Plaintiffs challenged 93% of M&A deals valued at over $100 million.1
While class-action plaintiffs occasionally win money for corporate shareholders through settlement or at trial, many plaintiffs settle their suit on behalf of other stockholders in exchange for additional disclosures regarding the merger or other “therapeutic” (i.e., non-monetary) remedies. Of course, counsel to the plaintiff routinely seeks, and often receives, hundreds of thousands of dollars in fees for these supposed benefits to the absent class.
Stockholders may be suspicious of the value of these settlements. However, if a stockholder wishes to critically evaluate the settlement of class or derivative actions, significant hurdles often stand in the way.
Settlement notices may arrive on a stockholder’s desk mere days before the court-ordered deadline for a stockholder to raise an objection. Even if a stockholder receives timely notice, additional information about the litigation may be difficult or expensive for the stockholder to acquire.
Margrave Law can help stockholders to analyze the value of class action and derivative settlements and, if appropriate, assist in raising objections before the appropriate court. If you have questions regarding the settlement of a class or derivative action, please contact the firm.
Selected Proposed Settlements3
Case: In re Tile Shop Holdings, Inc. Stockholder Derivative Litigation, C.A. No. 10884-VCG
Court: Delaware Court of Chancery
Case: Hignett and Barkan v. Adams and Hartcorn, C.A. No. 12694-VCG
Court: Delaware Court of Chancery
Case: In re Saba Software, Inc. Stockholder Litigation, C.A. No. 10697-VCS
Court: Delaware Court of Chancery
1 See Cornerstone Research, Shareholder Litigation Involving Acquisitions of Public Companies — Review of 2014 M&A Litigation 3 (2015).
2 C. A. No. 10765-VCL at 65 (Del. Ch. Oct. 9, 2015) (transcript).
3 Data on current class action settlements is provided for informational and educational purposes. This chart lists selected cases that may be of interest, and does not purport to list every stockholder class or derivative action subject to settlement.
While effort has been taken to ensure that the data herein was accurate at the time of publication, the status of litigation changes frequently and may have changed after publication. This information is not a substitute for legal counsel in specific instances, nor is it intended to create an attorney-client relationship between Margrave Law and any other party, including without limitation any stockholder. Please see the disclaimer page for more details.