M&A 'Pure Omission' Claims Test Limits Of Securities Laws
Law360 (November 5, 2019, 3:12 PM EST) -- It has been widely observed that merger litigation plaintiffs fled state courts for federal courts following the Delaware Chancery Court’s 2016 Trulia decision, which precluded them from settling state law claims based on disclosure of immaterial additional information to shareholders.
But plaintiffs gave up quite favorable Delaware procedural and substantive law in the hope of finding a more hospitable environment for quick settlements. Section 14 of the Securities Exchange Act of 1934 — merger plaintiffs’ new standard claim — does not precisely map to Delaware fiduciary duty law regarding disclosure.
Instead of notice pleading and the leverage gained by the potential...
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