On February 22, 2017, Matthew Murphy published "From Chancery Court to Federal Court: The Obstacles to a Post-Trulia Migration" in The Review of Securities & Commodities Regulation, Vol. 50, No. 4. The following is an excerpt:
For many years, shareholder suits challenging corporate mergers and acquisitions stuck to a familiar script. From deal to lawsuit to negotiated settlement, the outcome was invariably swift: defendants gained broad releases from liability; plaintiffs' lawyers won hundreds of thousands of dollars in fees; and shareholders received token disclosures supplementing the proxy statement. The majority of those cases were litigated in the Delaware Court of Chancery, which generally approved the predictable "disclosure-only" settlements. But in early 2016, the Court of Chancery changed course, rejecting such a settlement in In re Trulia, Inc. Stockholder Litigation and warning practitioners to expect continued judicial scrutiny in the future. At first glance, the federal courts might seem like the next stop for plaintiffs' attorneys post-Trulia — an alternative to the suddenly less-friendly Delaware courts. As we explain here, however, federal securities laws carry their own set of challenges to shareholder-plaintiffs (and their attorneys) seeking to profit from M&A litigation.
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