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Delaware Ruling Could Complicate Class-Action Settlements

Jaclyn Jaeger | January 8, 2013

Closing the books on merger-related shareholder class-action litigation just got more complicated.

That's because Delaware's highest court ruled last month that a major investor can opt out of a class-action settlement in order to pursue a separate legal action related to a faulty merger deal. Litigation connected to merger and acquisition activity comprises the fasting growing area of shareholder class actions.

But don't put deal plans on ice just yet. Securities litigation lawyers say the narrow scope of the ruling means it may not come into play in many settlements, although it could push companies to make sure large shareholders are on board with an acquisition before signing on to the purchase.

In one of the more unusual and complex merger and acquisition cases in recent memory, the Delaware Supreme Court, in the case In Re Celera Corp. Shareholder Litigation, overruled in part and remanded an earlier ruling by the Delaware Chancery Court...

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