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Debating the Merits of the Boom in Merger Lawsuits

by Steven M. Davidoff
Publication: New York Times

March 8, 2013


The following is an excerpt from an article in the New York Times that mentions a report on merger litigation that Finance Professor Matt Cain co-authors with Steven Davidoff. To read the entire article visit: Debating the Merits of the Boom in Merger Lawsuits

Shareholder merger litigation is everywhere these days. And recent developments, including a decision in Delaware over the now completed acquisition of Transatlantic Holdings, show not only that merger litigation is here to stay, but also that courts still don’t know what to do about the proliferation of suits.

Merger litigation is when plaintiffs’ lawyers bring class-action lawsuits challenging an acquisition transaction. It’s a big issue these days because once you’ve announced a deal, you are likely to get sued. Really.

A yearly merger litigation report that I prepare with Matt Cain, an assistant professor at Notre Dame, shows that last year, 92 percent of all transactions with a value greater than $100 million experienced litigation. The average deal brought five different lawsuits. In addition, half of all transactions experienced multi-jurisdictional litigation, typically litigation in Delaware and another state.