In a decision that narrowed what actions can be brought by Delaware companies' stockholders in the context of a merger, the Delaware Court of Chancery dismissed claims brought against former 21st Century Fox executives, including three members of the Murdoch family.
2019 went down as another record year for law firm mergers. But what do the numbers teach us? Did the tendency to merge apply to law firms across the board? Is the merger mania likely to continue in 2020? What was the impetus for record number of mergers? This article breaks down the available data to answer these questions and attempts to give us a glimpse into the future.
Following the Delaware Chancery Court's ruling in In re Trulia, Inc. that effectively closed the door to 14(a) disclosure-based settlements in Delaware state court, federal courts saw an influx of 14(a) "merger objection" litigation. More often than not, these suits are quickly dismissed following the company's issuance of a supplemental proxy with additional disclosures and the parties negotiate a mootness fee. The transaction closes and all parties move on — or so we thought. An emerging trend suggests that exposure to 14(a) claims may coming back from the near dead.
As law firms endeavor to survive in an increasingly competitive world, one strategy picking up steam is the law firm merger. In this article, we recap law firm merger activity in 2018 and consider the economic outlook for law firm mergers for 2019.
Like poorly-behaved school children, new technologies and intellectual property (IP) are increasingly disrupting the M&A establishment. Cybersecurity has become the latest disruptive newcomer to the M&A party.
Over the past few years, the U.S. Department of Justice (DOJ) has taken notable steps to advance the axiom that the business community and law enforcement are "partners, not adversaries." DOJ has now taken its guidance one step further, announcing that the FCPA Corporate Enforcement Policy would apply to all potential wrongdoing discovered by an acquirer in the course of a merger or acquisition, not just to FCPA violations.
The Numbers Say Yes, But Not for the Reasons Many May Think
Conventional wisdom has it that mergers enhance profitability through increased revenues and reduced costs. However, the numbers contradict this view: post-merger revenues are lower relative to competitor firms than are the sum of the predecessor firms' revenues, and costs per lawyer increase markedly.
Mergers and Acquisitions
A few recent decisions from the Delaware Court of Chancery provide useful information to corporate executives who are involved in the sale or purchase of businesses, or who are involved in joint ventures in which the sales price or the post-closing profit distribution is based on certain milestones being reached.
Corporate practitioners have been closely following developments in Delaware's shareholder appraisal litigation. Much of the interest concerns the court's "fair value" determination and the risk that an acquiring company will have to pay appraisal petitioners more than the merger deal price. In a much-anticipated decision, the Delaware Supreme Court provides valuable guidance about the relative importance of the deal price in the court's adjudication of the "fair value" of a petitioner's shares.
On June 19, the U.S. Supreme Court upended years of jurisprudence to hand corporations a gift: a far more stringent definition of specific jurisdiction that will force plaintiffs to bring suit in multiple state courts rather than join their claims to those in far-flung jurisdictions.
