Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Joseph M. McLaughlin and Shannon K. McGovern. Courtesy photos

“Mootness fees” to plaintiffs’ counsel after a voluntary dismissal have become a standard feature of deal litigation resolved before a stockholder motion to enjoin a transaction based on alleged proxy disclosure deficiencies is decided. After the sudden but widespread adoption in Delaware and elsewhere of sharp limitations on “disclosure-only” settlements—where the parties agree to settle solely on the basis of supplemental proxy disclosures in exchange for comprehensive class-wide releases of all claims relating to the transaction (followed by class counsel’s fee application for contributing to the disclosure benefit)—mootness fees have replaced disclosure-only settlements as the ordinary method of resolving disclosure-focused deal litigation. This column explains the important differences between these two approaches to resolving deal litigation. It also examines a recent federal decision currently on appeal to the Seventh Circuit in which the court, unlike Delaware courts, when addressing a negotiated mootness fee decided to “exercise its inherent powers to police potential abuse of the judicial process—and abuse of the class mechanism in particular—and require plaintiffs’ counsel to demonstrate that the disclosures for which they claim credit” were “plainly material” to stockholders—a standard Delaware reserves for disclosure-only class-wide settlements. House v. Akorn., 2018 WL 4579781, at *3 (N.D. Ill. Sept. 25, 2018). The continuing migration of deal litigation from Delaware to other fora (usually federal court to avoid Delaware forum selection clauses) makes Akorn an important read.

This premium content is locked for
Delaware Business Court Insider subscribers only.

*May exclude premium content
Already have an account?
Interested in customizing your subscription with Law.com All Access?
Contact our Sales Professionals at 1-855-808-4530 or send an email to groupsales@alm.com to learn more.


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2019 ALM Media Properties, LLC. All Rights Reserved.