Del. Scrutiny Of M&A Settlements Leads To Varying Decisions

Law360, New York (November 16, 2015, 10:52 AM EST) -- In a series of rulings issued over the last few months, the Delaware Court of Chancery has shaken up decades of well-settled authority in the area of deal litigation settlements. The Court of Chancery historically has approved broad releases in deal litigation settlements, which cover not only fiduciary duty claims but all claims, known and unknown, based on the same factual predicate. Defendants have taken comfort in the fact that approval of a settlement involving such a release provides certainty and finality. However, with these recent rulings, the court has begun to question whether settlements involving therapeutic benefits (such as supplemental disclosures or deal protection changes) should support broad releases for defendants. The increased scrutiny in this area has resulted in varying decisions by the members of the court....

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