By Matthew Solum, Kirkland & Ellis, LLP
M&A lawsuits, once predominantly filed in Delaware and other state courts, have shifted to federal court under Exchange Act Section 14(a) in the wake of the Delaware Chancery Court’s 2016 decision in In Re Trulia Stockholder Litigation, according to Matthew Solum of Kirkland & Ellis. In this article, he notes that the shift has raised a number of questions, including to what extent Section 14 provides a private right of action, what pleading standards attach to such an action, and whether Section 14 presents a viable theory of recovery for most plaintiffs once the transaction has closed and the threat of disruption to the deal is gone. He examines recent cases that address these questions, as well as whether freewheeling settlements that have become common in Section 14 cases may be facing a backlash from courts.
To read the entire article, click here.