Home -> Law Blog Directory -> Corporate Governance Blogs -> The Harvard Law School Corporate Governance Blog

OR PHONE (866) 635-1838 for Bankruptcy Help, (866) 635-6190 for Divorce,
(866) 635-2689 for Personal Injury or (866) 635-9402 for Criminal Defense

Find a Local Lawyer

Bankruptcy (866) 635-1838
Divorce (866) 635-6190
Personal Injury (866) 635-2689
Criminal Defense (866) 635-9402

Corporate Governance

: The Harvard Law School Corporate Governance Blog

Recent Delaware Decisions Reaffirm Merger Terminates Derivative Standing

By Harvard Law School Program on Corporate Governance

ADVERTISEMENTS

Editor?s Note: Theodore Mirvis is a partner in the Litigation Department at Wachtell, Lipton, Rosen & Katz. This post is based on a Wachtell Lipton firm memorandum by Eric M. Roth, Stephen R. DiPrima and Graham W. Meli, and relates to the decision of the Delaware Supreme Court in Ark. Teacher Ret. Sys. v. Caiafa, which is available here.

The Delaware Supreme Court has long recognized that a merger terminates the standing of the target corporation?s former shareholders to maintain a derivative action on the target?s behalf, with two narrow exceptions: if the merger is fraudulently designed solely to eliminate derivative standing or if it is merely a ?reorganization? that does not affect the shareholders? ownership of the enterprise. Despite efforts by the plaintiffs? bar to circumvent this rule, two recent decisions relating to the Countrywide-Bank of America merger have reaffirmed these fundamental principles.

Click here to read the complete post...

Full post as published by The Harvard Law School Corporate Governance Blog on July 20, 2010 (boomark / email).