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A Win for Our Publicly Traded Clients: A Decline in M&A Disclosure-Only Suits

Or at least we are hoping this trend continues. This phenomenon we are referring to is the rapid decline in shareholder litigation, stemming from merger and acquisition deals valued at over $100M. The plaintiff’s bar is notorious for finding loopholes in business transactions and spinning those gaps as major damage to shareholders, in this case what is referred to as disclosure-only lawsuits. As is the case in most D&O litigation trends, the outcome is of little or no value to the shareholders but typically creates big windfalls for the law firms bringing the suit. Disclosure-only lawsuits/settlements are no exception. When a company announces a potential merger or acquisition of another company, it must provide detailed information to the shareholders in order to obtain their approval.