Arthur R. Bookout and Edward B. Micheletti are Partners at Skadden, Arps, Slate, Meagher & Flom LLP. This post is based on their Skadden memorandum and is part of the Delaware law series; links to other posts in the series are available here.
The Delaware Supreme Court recently issued two opinions weighing in on the scope of disclosures involving board advisors in connection with M&A transactions that warrant close attention. In both rulings — each written en banc — the Delaware Supreme Court reversed the lower courts’ dismissals of all claims because (among other reasons) certain material information about the target companies’ advisors was not disclosed. The Delaware Court of Chancery recently cited both rulings in denying motions to dismiss disclosure claims against directors and aiding and abetting claims against financial advisors. Companies and financial advisors alike should be aware of the court’s rulings and changes to Delaware law, as they will undoubtably have an impact on disclosures with regard to advisors’ prior and current engagements, as well as any proprietary equity holdings of merger parties.
