DE Chancery responds to growth in shareholder cases


“Currently, over 90% of M&A deals over $100 million are challenged by shareholders,” write Vice Chancellor Donald Parsons Jr. (Delaware Court of Chancery) and attorney Jason Tyler (Sullivan & Cromwell) in a new paper. The recent growth in shareholder derivative suits and class actions has impacted Delaware procedural law in four areas, the authors say: 1) awards of attorneys’ fees to plaintiffs’ counsel; 2) certification and removal of lead plaintiffs; 3) motions to stay or dismiss because of concurrent litigation in another jurisdiction; and 4) the interaction of pleading rules, forum shopping, and statutory books and records actions.

Although the paper doesn’t discuss the particular role of business appraisals in shareholder litigation, overall it demonstrates how the country’s “premier business court” is dealing with the sheer volume of corporate and alternative business entity cases to achieve a more “measured” balance of responsiveness, cost, and consistency on a procedural as well as substantive level.


Categories