With merger and acquisition activity on the rise, a concomitant increase in litigation challenging transactions is a given. Recently, these types of deal litigation cases have posed an interesting question, one not of substantive law but of jurisdictional concern: Where should deal litigation disputes be litigated?
Not so long ago the answer to this question was nearly universally presumed. When the company at the center of the deal litigation was incorporated under Delaware law, any litigation would be filed and resolved in the Delaware Court of Chancery, a world-renowned business court known for its experience in handling such matters. That, however, appears to no longer be the case. Today, opportunistic plaintiffs’ counsel attempt to create leverage for themselves by filing deal litigation raising issues of Delaware law, not only in Delaware, but also in a non-Delaware forum. As a result, multiple sets of plaintiffs file multiple lawsuits in multiple locations related to the same deal, almost as a matter of course.
