Wisconsin Courts Reject Heightened Scrutiny in Mergers and Acquisitions Litigation
Other than Delaware, very few states have well-developed jurisprudence concerning the law to be applied in shareholder lawsuits challenging merger and acquisition transactions. Over the last few years, the Wisconsin courts have had the opportunity to develop law in this area, applying the business judgment rule to evaluate the validity of merger transactions and rejecting Delaware-style heightened scrutiny. Absent specific allegations of a breach of the duty of loyalty or bad faith, the Wisconsin courts are not likely to interfere with a board’s decision to enter into a merger transaction. The Wisconsin courts have also suggested that the same analytical framework may apply to the judicial review of proxy materials.
© 2011 Bloomberg Finance L.P. All rights reserved. Originally published by Bloomberg Finance L.P. in the Vol. 5, No. 20 edition of the Bloomberg Law Reports—Corporate and M&A Law. Reprinted with permission. Bloomberg Law Reports® is a registered trademark and service mark of Bloomberg Finance L.P.