So it turns out, you can put the genie back in the bottle. About 10 years ago, the merger litigation business exploded. Taking advantage of the nuance of Delaware corporate law, shareholder-plaintiffs discovered that they could bring suit to challenge nearly any public company merger transaction.
Because so-called Revlon duties shifted the burden to director defendants to prove they acted reasonably in approving a sale of the company, such suits were difficult to dismiss on the pleadings. And because Delaware recognizes a duty of complete disclosure as part of directors’ fiduciary duties, plaintiffs realized they could press for an injunction urging the disclosure of additional facts and details whenever a Delaware company issued a merger proxy statement.
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