Alexandra C. Boudreau is counsel and Daniel W. Halston is partner at Wilmer Cutler Pickering Hale and Dorr LLP. This post is based on their WilmerHale memorandum.
In the past few years, there has been a dramatic rise in the number of M&A disclosure lawsuits filed in federal court. Recently, courts have begun to fight back against this nuisance litigation using different approaches. This post summarizes those developments.
Recently, many have reported on the increase in the number of lawsuits in Federal Court challenging public company mergers brought by shareholders alleging violations of Section 14(a), which prohibits false and misleading statements in proxy materials. It appears that after the Delaware Court of Chancery cracked down on reflexively filed M&A suits in In re Trulia Inc. Stockholder Litigation, 129 A.3d 884 (Del. Ch. 2016), the plaintiffs’ bar diverted its flood of litigation following the public announcement of a merger into this previously quiet rivulet. The rush of 14(a) suits continues unabated this year.