According to the Competitive Enterprise Institute, over 97% of mergers and acquisitions result in "strike suits," litigation seeking to enjoin a merger that often quickly settles for attorneys' fees and supplemental disclosures to shareholders. In In Re: Walgreen Co. Stockholder Litigation, 832 F.3d 718, a recent case over such a settlement, Judge Richard Posner called the practice a "racket," and the Seventh Circuit rejected the lawsuit’s claims. Meanwhile, Delaware and New York courts have come out on opposite sides of the issue.
Ted Frank of the Competitive Enterprise Institute, who successfully argued Walgreen and has multiple appeals on the subject pending in other jurisdictions, discussed developments in the area over the last year and answer questions.
- Theodore H. Frank, Senior Attorney & Director, Center for Class Action Fairness (CCAF), CEI