As anyone reading this blog is likely aware, shareholders (and their lawyers) continue to file “merger objection” lawsuits at a rather astounding rate.  In a March 2012 report, Cornerstone reported that 96 percent of mergers valued at over $500 million attract at least one lawsuit, and attract on average 6.2 lawsuits per deal. Eighty-five percentof mergers valued from $100-500 million attract a lawsuit (4.1 per deal on average).2  While most shareholder plaintiffs initially file suit looking for a “price bump” in the offered merger consideration, many settle for “supplemental disclosures” – in essence, additional information inserted into the proxy statement, which the plaintiff claims is material, the defendant claims is immaterial, and the conflict is resolved through payment of negotiated attorneys’ fees to plaintiff’s counsel with no monetary benefit to the class.

The stack of “year-end” blog posts and summaries clogging inboxes after the holidays confirms that the proliferation of merger objection lawsuits remains a matter of great concern to courts, commentators, and companies looking to acquire or be acquired.  In the case of the latter, there has even been some talk that D&O insurance carriers have taken merger litigation into account when calculating policy terms and premiums for 2013.  Some D&O insurers now consider merger litigation a “high-frequency product,” resulting in higher premiums, higher deductibles for M&A-related activity, and even M&A exclusions.3

Accordingly, 2012 was a year that featured some pushback by courts (and court-commentators) against merger litigation activity, especially (but not exclusively) in Delaware.

via Continuing developments in merger-related litigation.