Delaware Court of Chancery Clamps Down on Disclosure-Only Settlements

In recent years, lawsuits challenging mergers and acquisitions have become almost ubiquitous. Virtually all of these cases settled for disclosure-only settlements in which the target’s stockholders received no money. Of course, money did change hands, but that money went to the plaintiffs’ lawyers, who often were the real drivers behind this sort of litigation. Now the Delaware Court of Chancery is clamping down on these disclosure-only settlements.