Professor Sean Griffith’s victory in a pro-bono case on disclosure settlements in merger lawsuits has been featured in ProfessorBainbridge.com.
My congratulations to the indefatigable Sean Griffith, who has fought the good fight against frivolous M&A litigation and the especially pernicious phenomenon of disclosure-only settlements. In Griffith v. Quality Distribution, Inc., Sean and his counsel persuaded the Florida Court of Appeals to adopt the Delaware rule laid out in In re Trulia:
In In re Trulia, the Delaware Court of Chancery discussed the proliferation of “disclosure settlements” and the problems associated with a request to approve such a settlement. 129 A.3d at 887, 891-99.
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Today, the public announcement of virtually every transaction involving the acquisition of a public corporation provokes a flurry of class action lawsuits alleging that the target’s directors breached their fiduciary duties by agreeing to sell the corporation for an unfair price. On occasion, although it is relatively infrequent, such litigation has generated meaningful economic benefits for stockholders when, for example, the integrity of a sales process has been corrupted by conflicts of interest on the part of corporate fiduciaries or their advisors.