Mitigating the Risks of Stockholder Litigation in M&A Transactions

The statistics are remarkable. Virtually every merger transaction nowadays involving a public company will be the subject of stockholder litigation. That is true regardless of the size of the deal, the size of the premium, the form of the transaction, the identity of the parties or the care with which the board proceeded. Often, plaintiffs' firms announce “investigations” of transactions within a matter of hours of the announcement of a transaction—and sometimes within minutes. Given the near certainty that your deal will be the subject of litigation, this article provides a few common sense ways to mitigate exposure and to ensure that the inevitable lawsuits result in minimal disruption.