In the most recent of several decisions issued by the Delaware Court of Chancery over the past few months addressing proposed disclosure-only settlements of deal-related litigation, Vice Chancellor J. Travis Laster rejected the settlement of a suit brought by stockholders of Aruba Networks challenging the company’s $2.7 billion all-cash acquisition by Hewlett-Packard in In re Aruba Networks Stockholder Litigation, C.A. No. 10765-VCL (Transcript Ruling, October 9, 2015).
The merger was announced March 2 and stockholder class-action complaints challenging the proposed transaction were filed shortly thereafter. Following expedited discovery, the parties executed a memorandum of understanding April 22 based on supplemental disclosures issued by Aruba Networks that same day. The Aruba Networks stockholders approved the merger May 1. The settlement, if approved, would have released all potential deal-related claims. Plaintiffs counsel also sought approval of an award of $387,500 in attorney fees.
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