Federal judge: time to end “racket” of “worthless” merger litigation

“U.S. District Judge Thomas Durkin of Chicago has thrown down the gauntlet: In a ruling issued [June 24], he said it’s time to end the ‘racket’ of ‘worthless’ M&A [mergers and acquisitions] shareholder litigation.” [Alison Frankel/Reuters]

“The plaintiffs in the underlying lawsuits sued Akorn and its board of directors in connection with the proposed merger, seeking additional disclosure regarding the transaction. After Akorn revised its proxy statement, plaintiffs dismissed their lawsuits in exchange for a mootness fee. Ted Frank, an Akorn shareholder, moved to intervene and object to the fee.” The fee amount in question was $322,500. [Kevin LaCroix/D&O Diary] See also Seventh Circuit review of the Subway footlong settlement (“utterly worthless,” “no better than a racket”), which likewise followed a Ted Frank objection.

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