In evaluating the damages standards set forth in Section 14(a) pleading cases, it is important to consider the specific nature of the alleged misrepresentations or omissions and their relation to the harm alleged in the complaint. Specific material misrepresentations that go to the heart of the transaction and caused economic loss must be alleged. 7 This article briefly discusses the three damages theories that courts have considered in pleading Section 14(a) cases: ‘‘out-of-pocket,’’ ‘‘benefit-of-the-bargain,’’ and ‘‘lost opportunity’’ or ‘‘disgorgement.’’ When appropriate, multiple alternative damage theories may be asserted in the same case.
Reproduced with permission from Mergers & Acquisitions Law Report, 15 MALR 799, 05/28/2012. Copyright 2012 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com