Abstract

http://ssrn.com/abstract=2310935
 
 

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Standing at the Singularity of the Effective Time: Reconfiguring Delaware's Law of Standing Following Mergers and Acquisitions


S. Michael Sirkin


Seitz Ross Aronstam & Moritz LLP

August 15, 2013

The Business Lawyer, Volume 69, February 2014

Abstract:     
This article examines the doctrine of standing as applied to mergers and acquisitions of Delaware corporations with pending derivative claims. Finding the existing framework of overlapping rules and exceptions both structurally and doctrinally unsound, this article proposes a novel reconfiguration of existing Delaware law under which Delaware courts would follow three black-letter rules: (1) stockholders of the target should have standing to sue target directors to challenge a merger directly on the basis that the board failed to achieve adequate value for derivative claims; (2) a merger should eliminate target stockholders’ derivative standing; and (3) stockholders of the acquiror as of the time a merger is announced should be deemed contemporaneous owners of claims acquired in the merger for purposes of derivative standing. Following these rules would restore order to the Delaware law of standing in the merger context and would advance the important public policies served by stockholder litigation in the Delaware courts.

Number of Pages in PDF File: 46

Keywords: Delaware, mergers, acquisitions, derivative, standing, corporate

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Date posted: August 17, 2013 ; Last revised: April 8, 2014

Suggested Citation

Sirkin, S. Michael, Standing at the Singularity of the Effective Time: Reconfiguring Delaware's Law of Standing Following Mergers and Acquisitions (August 15, 2013). The Business Lawyer, Volume 69, February 2014. Available at SSRN: http://ssrn.com/abstract=2310935 or http://dx.doi.org/10.2139/ssrn.2310935

Contact Information

S. Michael Sirkin (Contact Author)
Seitz Ross Aronstam & Moritz LLP ( email )
100 S West Street, Suite 400
Wilmington, DE 19801
United States
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