• DE Court Enjoins Merger Over Disclosures Relating to Financial Advisor Fees and Management Employment Expectations
  • March 23, 2011 | Authors: Steven M. Haas; G. Roth Kehoe; Gary E. Thompson
  • Law Firms: Hunton & Williams - Richmond Office ; Hunton & Williams - Atlanta Office ; Hunton & Williams - Richmond Office
  • A recent Delaware decision enjoined a stockholders meeting to vote on a merger until the target company disclosed the amount and contingent nature of the fees payable to its financial advisor and the timing of the chief executive officer’s expectation of post-closing employment with the buyer. Although the court found that the plaintiff was unlikely to succeed on the merits in challenging the board of directors’ fiduciary duties in conducting the sale process, the decision shows the Delaware courts’ continued scrutiny of disclosure of potential conflicts of interest.