Delaware, as the state of incorporation for two-thirds of the Fortune 500 and half of all publicly traded companies, is the center of merger and acquisition (M&A) litigation. Nearly all public company mergers and acquisitions, and a significant number of private company transactions, are challenged by shareholders in the courtroom. These cases are brought predominately in the Delaware Court of Chancery.
Importantly, the M&A litigation process does not begin with the filing of a lawsuit. It may occur throughout the lifespan of a transaction, from preliminary negotiations to closing and thereafter.
The foundation of Delaware’s long-standing preeminence as the corporate capital of the world is its corporate code, the Delaware General Corporation Law, and alternative entity statutes, each of which are amended and developed to reflect the needs and concerns of corporate and financial America on an ongoing basis. The state’s foremost position in the realm of business law is further bolstered by the Court of Chancery and Delaware Supreme Court, which, utilizing a robust body of corporate law, strive to provide efficient resolutions to business disputes and challenges to actions by the board of directors, including those stemming from mergers and acquisitions. The Delaware judiciary’s handling of M&A litigation is renowned for its timely, competent, impartial and reasonable resolution of deal challenges.
Transactions often raise difficult questions of Delaware law and many mergers and acquisitions involve significant litigation risk. As a result, fiduciaries should carefully examine and understand the value of the corporation and transaction being proposed as well as other options available.
This guide is intended to provide in-house counsel, directors, officers and other fiduciaries with the tools to effectively approach mergers and acquisitions involving Delaware entities. In particular, this guide provides sufficient detail on the full spectrum of frequently arising aspects of mergers and acquisitions which have resulted in litigation, but it is written in such a way that it is easily understandable and accessible for those unfamiliar with the legalese in the lengthy and complex business law decisions issued by the Delaware courts.
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