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Corporate Entities General Counsel and In House Counsel Litigation Securities Litigation

Court of Chancery Dismisses Post-Closing Challenge to Merger Transaction

Stockholders who believe that a board breached its fiduciary duties in connection with information provided to stockholders asked to vote for a merger transaction can either seek to enjoin the transaction or seek damages post-closing. In light of the Delaware courts’ jurisprudence post-Corwin, such claims are unlikely to succeed

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Stockholders who believe that a board breached its fiduciary duties in connection with information provided to stockholders asked to vote for a merger transaction can either seek to enjoin the transaction or seek damages post-closing. Of course, the court cannot enjoin a transaction if a stockholder who files a complaint fails to seek injunctive relief, even where that stockholder also alleges disclosure violations. In that circumstance, the stockholder post-closing must determine whether to pursue damages, including through quasi-appraisal.

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