A real change is going on in stockholder litigation in Delaware. Yet it is largely unnoticed because of the uproar over what will someday be seen as just a Supreme Court decision that did not have a lasting impact. We need a longer perspective to appreciate what is happening.
First, however, we need to understand the recent problems in stockholder litigation that have provoked such ire. For several years now, almost every significant corporate merger of public companies has attracted litigation. Lawyers for small stockholders file these suits as soon as a possible deal is announced and even before the details are established. Compounding the costs of this litigation, these suits are often filed in several jurisdictions, forcing companies to defend themselves against the same allegations in multiple forums. The speed with which these suits are filed must mean that little, if any, real factual investigation is done before allegations of wrongdoing are made. It is no wonder corporate defendants find this litigation vexatious.
