Feature

7th Circ. Has Chance To Cut Off 'Mootness Fee' Merger Cases

Law360 (September 18, 2018, 8:28 PM EDT) -- Against a backdrop of near-constant shareholder litigation challenging mergers, the Seventh Circuit is the first federal circuit that’s been asked to stop a burgeoning litigation strategy among plaintiffs attorneys that some view as extortion of the merging companies and their shareholders.

The strategy centers on plaintiffs attorneys’ ability to collect so-called mootness fees in exchange for dismissing class actions that accuse merging companies of disenfranchising their shareholders. The fees come after the companies make some additional disclosures about the deal, mooting the litigation but giving the attorneys a way to get paid in exchange for its purported impact.

Lawsuits and class...

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