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The Delaware Supreme Court issued a ruling on December 14, 2017 that endorsed its interpretation of the "Efficient Market Hypothesis" as a foundation for relying upon market pricing to define a company’s “fair value” in appraisal proceedings. The Forum accordingly reported that it would resume support of marketplace processes instead of judicial appraisal for its participants' realization of intrinsic value in opportunistically priced but carefully negotiated buyouts. See:

December 21, 2017 Forum Report

 Reconsidering Appraisal Rights for Long Term Value Realization



Referenced in Forum distribution:

Court view of class action M&A litigation that does not benefit shareholders


Source: The Wall Street Journal, December 26, 2013 article


Judge Blasts Plaintiff's Lawyers in Talbots Deal Case

Says Disclosure Settlement Benefited the Attorneys More Than Shareholders


By Liz Hoffman

Dec. 26, 2013 4:29 p.m. ET

Talbots's shareholders who sued for a higher price received no more. Their lawyers collected $237,500. Bloomberg News

Delaware's top corporate-law judge blasted the lawyers who challenged last year's takeover of retailer Talbots Inc., saying the settlement they negotiated benefited their firms more than the shareholders they represented.

Still, Chancellor Leo E. Strine Jr. approved the requested $237,500 fee for the lawyers representing a group of Talbots shareholders, saying it wasn't his place to reject a negotiated settlement.

He said he "easily" could have awarded as little as $50,000 for the work, about one-tenth of the going rate for M&A lawsuits, according to a recent study by Cornerstone Research.

"The social utility of cases like this continuing to be resolved in this way is dubious," the chancellor said at a Dec. 16 hearing, according to a transcript.

He added: "If it were a perfect world, this case would have simply been graciously withdrawn by all the plaintiffs' lawyers...and [they would have] said, 'Our bad, and our apologies to the directors.'"

Lawyers, led by Juan Monteverde from Faruqi & Faruqi LLP and Shannon Hopkins from Levi & Korsinsky LLP, sued Talbots after it agreed to sell itself to private-equity firm Sycamore Partners LLC for $2.75 a share, or about $193 million. The suit alleged that the company's board failed to get a fair price.

A spokesman for Sycamore declined to comment. Messages and emails to Mr. Monteverde and Ms. Hopkins weren't returned on Thursday.

In the settlement approved by Mr. Strine, existing shareholders didn't receive a higher price for their shares. Instead, Talbots agreed to disclose some additional details about the deal, including one analyst's bullish outlook for the company and assurances that Talbots's financial advisor, Perella Weinberg Partners LP, didn't have any conflicts of interest.

"I cannot get anywhere close to finding that these things are a material disclosure," Mr. Strine said, suggesting the information didn't mean much to shareholders, who approved the deal in August 2012.

The number of private lawsuits over mergers and acquisitions has soared in recent years. In 2007 shareholders challenged 53% of transactions over $500 million, according to Cornerstone Research. Through the first three quarters of 2013, the figure was 98%. The average deal now draws six lawsuits filed in different state and federal courts, Cornerstone found.

About 80% of these cases settle as the Talbots case did, with no additional money for shareholders. Instead, companies agree to make more disclosures and pay the plaintiffs' legal fees. In return, they get to close their deal without the threat of a long court battle.

Chancellor Strine, a member of the chancery court since 1998 and its chief judge for the last year and a half, has shown thinning patience for these "disclosure-only" settlements. In March, he rejected such a pact to end litigation over the sale of reinsurer Transatlantic Holdings Inc., saying the plaintiffs had "achieved nothing substantial for the class."

Write to Liz Hoffman at

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