John Stigi III on Acquisitions

Delaware Enacts Sweeping Changes to the Delaware General Corporation Law

On March 25, 2025, the governor of Delaware signed into law Senate Bill 21, over much opposition from the plaintiffs’ bar and some academics. The bill, which amends Sections 144 and Section 220 of the Delaware General...more

4/2/2025 / Acquisitions , Books & Records , Controlling Stockholders , Corporate Governance , Delaware , Delaware General Corporation Law , Fiduciary Duty , Mergers , New Legislation , Shareholder Litigation

Ninth Circuit Applies Birnbaum Rule to Affirm Dismissal of Claims by SPAC Investors Asserted Against Target Company Executives for...

In Max Royal LLC v. Atieva, Inc., No. 23-16049, 2024 U.S. App. LEXIS 19910 (9th Cir. Aug. 8, 2024), the United States Court of Appeals for the Ninth Circuit affirmed the dismissal of a securities class action brought by...more

8/16/2024 / Acquisitions , Appeals , Class Action , Corporate Governance , Dismissals , Investors , Rule 10(b) , Securities and Exchange Commission (SEC) , Securities Litigation , Securities Violations , Special Purpose Acquisition Companies (SPACs)

The Delaware Court of Chancery Puts Practitioners on Notice Regarding Voting Formalities Around Merger Agreements

In Ap-Fonden v. Activision Blizzard, Inc., C.A. No. 2022-1001-KSJM, 2024 WL 863290 (Del. Ch. Feb. 29, 2024), the Delaware Court of Chancery (McCormick, C.) declined to dismiss a claim alleging that the Board of Directors of...more

3/6/2024 / Acquisition Agreements , Acquisitions , Board of Directors , Business Litigation , Delaware General Corporation Law , Merger Agreements , Mergers , Voting Requirements

The Delaware Court of Chancery Confirms that Duty of Oversight Claims Against Corporate Officers Are Subject to the Same High...

In Segway Inc. v. Hong Cai, 2023 Del. Ch. LEXIS 643 (Del. Ch. Dec. 14, 2023), the Delaware Court of Chancery (Will, V.C.) dismissed a claim for breach of fiduciary duty brought by Segway Inc. (the “Company”) against its...more

12/28/2023 / Acquisitions , Board of Directors , Breach of Duty , Business Litigation , Caremark claim , Commercial Litigation , Corporate Counsel , Corporate Officers , Dispute Resolution , Fiduciary Duty , Mergers , Oversight Duties

Delaware Court of Chancery Clarifies Heightened Standard for Recovery of Attorneys’ Fees in Disclosure-Based Deal Litigation

In Anderson v. Magellan Health, Inc., No. 2021-0202, — A.3d —-, 2023 WL 4364524 (Del. Ch. July 6, 2023) (McCormick, C.), the Delaware Court of Chancery addressed the circumstances under which the Court will award a...more

7/18/2023 / Acquisitions , Attorney's Fees , Board of Directors , Breach of Duty , Business Litigation , Corporate Governance , Delaware , Disclosure , Fiduciary Duty , Injunctive Relief , Mergers , Proxy Statements , Securities and Exchange Commission (SEC) , Securities Litigation , Shareholder Litigation , Shareholders

Delaware Supreme Court Shines Spotlight on Boilerplate Purchase Agreement Provisions

\This December, the Delaware Supreme Court penned two decisions that shined the spotlight on purchase agreement provisions that are often afterthoughts in negotiations. In Golden Rule Financial Corporation v. Shareholder...more

12/30/2021 / Acquisitions , Business Litigation , Buyers , Corporate Counsel , DE Supreme Court , Dismissals , Mergers , Purchase Agreement , Sellers

Delaware Court of Chancery Decision Provides Guidance on M&A Earnouts

In Shareholder Representative Services LLC v. Albertsons Companies, Inc., 2021 WL 2311455 (Del. Ch. June 7, 2021), the Delaware Court of Chancery (Slights, V.C.) provided key guidance on mergers and acquisitions (“M&A”)...more

6/17/2021 / Acquisitions , Contract Terms , Due Diligence , Earn-Outs , Merger Agreements , Mergers

Fifth Circuit Affirms Dismissal Section 14(a) Complaint For Failure to Plead Facts Demonstrating Alleged Omissions from Proxy...

In Heinze v. Tesco Corp., No. 19-20298, 2020 WL 4814094 (5th Cir. Aug. 19, 2020), the United States Court of Appeals for the Fifth Circuit affirmed the dismissal of a putative class action suit under Section 14(a) of the...more

8/25/2020 / Acquisitions , EBITDA , Mergers , Popular , Proxy Statements , PSLRA , Publicly-Traded Companies , Safe Harbors , Securities and Exchange Commission (SEC) , Shareholders

Delaware Court of Chancery Strictly Construes Right to Discovery of Stockholders Represented By a Contractually Created...

Merger agreements involving acquisitions of private companies often contain terms creating post-merger obligations or “earnouts” in favor of certain classes of selling stockholders. To address potential claims that may arise...more

6/2/2020 / Acquisitions , Controlling Stockholders , Discovery , Merger Agreements , Mergers , Publicly-Traded Companies , Shareholders

Delaware Chancery Court Provides Useful Guidance for Protecting Pre-Merger Privileges in Post-Closing Litigation Between Buyers...

In Shareholder Representative Services LLC v. RSI Holdco, LLC, No. 2018-0517-KSJM, 2019 WL 2290916 (Del. Ch. May 29, 2019), the Delaware Court of Chancery reaffirmed that a target company may protect its pre-merger privileged...more

6/6/2019 / Acquisitions , Attorney-Client Privilege , Corporate Counsel , Delaware General Corporation Law , Merger Agreements , Mergers , Privileged Communication , Protective Orders , Selling a Business

Ninth Circuit Splits From Other Circuits, Holding That a Negligence Standard Applies to a Claim Challenging Tender Offer...

In Varjabedian v. Emulex Corp., No. 16-55088, 2018 U.S. App. LEXIS 10000 (9th Cir. Apr. 20, 2018), the United States Court of Appeals for the Ninth Circuit split from the Second, Third, Fifth, Sixth and Eleventh Circuits to...more

4/27/2018 / Acquisitions , Class Action , Disclosure Requirements , Dismissals , False Statements , Financial Adviser , Negligence , Pleading Standards , Rule 10(b) , Rule 10b-5 , Scienter , Section 17(a) , Securities and Exchange Commission (SEC) , Securities Exchange Act , Securities Litigation

New York Appellate Division Revives Non-Monetary Class Action Settlement in M&A Class Action with Revised Standard of Review

In Gordon v. Verizon Communications, Inc., No. 653084/13, 2017 WL 442871 (N.Y. App. Div. Feb. 2, 2017), the Appellate Division of the Supreme Court of the State of New York, First Judicial Department (the “First Department”),...more

3/3/2017 / Acquisitions , Appeals , Attorney's Fees , Class Action , Disclosure Settlement , Mergers , Non-Monetary Payments , Remand , Reversal , Settlement , Shareholder Litigation , Standard of Review , Verizon

Delaware Court of Chancery Dismisses Post-Closing Disclosure Claims for Damages, Cautioning That Such Claims Are Best Pursued...

In Nguyen v. Barrett, C.A. No. 11511-VCG, 2016 WL 5404095 (Del. Ch. Sept. 28, 2016) (Glasscock, V.C.), the Delaware Court of Chancery dismissed an amended complaint seeking damages for alleged disclosure violations in...more

10/7/2016 / Acquisitions , AOL , Disclosure Requirements , Fees , Fiduciary Duty , Financial Adviser , Mergers , Motion to Dismiss , Policy Violations , Proxy Statements

Delaware Court of Chancery Applies Implied Covenant of Good Faith and Fair Dealing to Prohibit An Acquiring Entity From Diverting...

In American Capital Acquisition Partners, LLC v. LPL Holdings, Inc., CA NO. 9490-VCG, 2014 WL 354496 (Del. Ch. Feb. 3, 2014), the Delaware Court of Chancery applied the implied covenant of good faith and fair dealing to a...more

2/20/2014 / Acquisitions , Covenant of Good Faith and Fair Dealing , Mergers

John Stigi III

Sheppard Mullin Richter & Hampton LLP

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