Nearly as certain as death, and far more than taxes, fiduciary duty litigation has become essentially automatic upon the announcement of a public company transaction. While a fraction of these class actions develop into contested litigation about the terms of a deal, the vast majority settle early, often for nothing more than additional disclosures in the merger proxy statement or other SEC filing and the payment of attorney fees.
Critics have often complained that these lawsuits, and these settlements, serve no useful purpose. But the courts have routinely approved such “disclosure-only” settlements throughout the merger litigation boom of the past 15 years. Now that seems to be changing.
