Delaware Litigation Developments Impacting Financial Advisors

Over the last few years, significant developments in Delaware law and practice have changed the traditional M&A litigation landscape. These developments resulted in a dramatic reduction in pre-closing applications for injunctions that dominated the M&A litigation practice in Delaware for decades and a marked decrease in M&A-related filings overall in the Delaware Court of Chancery.¹ Instead, stockholder plaintiffs have focused their efforts primarily on selected cases pursued post-closing as money damages actions or, in certain instances, statutory appraisal proceedings.

These changes — particularly the increased attention in the Court of Chancery on money damages as a remedy — have resulted in stockholder plaintiffs crafting new litigation tactics that focus on defendants they believe have “deep pockets,” including financial advisors. As the court has explained, it is well-established under Delaware law that “because of the central role played by investment banks