C. N. V. Krishnan is Professor of Banking and Finance at Case Western Reserve University. This post is based on a recent paper by Professor Krishnan; Randall Thomas, Vanderbilt University; and Steven Davidoff Solomon, University of California Berkeley School of Law.
In our paper Divided Loyalties? The Role of Defense Litigation Counsel in Shareholder M&A Litigation, we examine the role of defense litigation counsel in merger and acquisitions (M&A) litigation. We theorize that defense litigation counsel may have two possibly conflicting roles in this litigation. First, defense litigation counsel will aim to defend the target company and its directors from claims that the directors breached their fiduciary duties to the target’s shareholders. Second, counsel will seek to ensure that the negotiated transaction is not enjoined, or otherwise halted by shareholders, and that in the absence of competing bidders, the transaction completes on its initial terms and price. These two goals may conflict as defense litigation counsel seeks to settle potentially worthy claims quickly and cheaply in order to ensure deal completion.
