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Legal Focus
JANUARY 2013
M&A Litigation U.S.
According to recent research by Cornerstone, 9 out of 10 mergers in 2010 and 2011 with a value of more than $100 million involved some form of dispute amongst the shareholders. As companies have no control over a shareholder’s choice to file a lawsuit against them, many are now seeking preventative measures to try and effectively avoid such litigation. To find out more about this, Lawyer Monthly speaks to Christine S. Azar and Michael W. Stocker from Labaton Sucharow LLP in the U.S.
Please introduce yourself and your firm.
Labaton Sucharow has an unusual dual role as a leader in both the securities class action bar and the booming field of merger and acquisition and shareholder derivative litigation. With more than fifty years of experience in litigating securities fraud cases and more than $6 billion in recoveries, the Firm’s deep bench of experience makes it go-to counsel for some of the largest institutional investors in the world.
The Firm’s services are not limited to securities fraud class actions, however. Labaton Sucharow has been successfully pursuing shareholder representative and derivative actions on behalf of investors for more than 20 years. The Firm, which consists of more than 60 attorneys, is a long-time defender of shareholder rights specializing in litigating actions related to freeze-out mergers and acquisitions, and has successfully prosecuted claims relating to executive compensation, interested party transactions, and other forms of misconduct.
The Firm maintains a Delaware office specializing exclusively in derivative and direct shareholder litigation, headed by partner Christine S. Azar, who has more than 10 years of experience in Delaware Court of Chancery. Because the Delaware courts put a premium on experience and familiarity with Chancery practice, our permanent presence in Wilming- ton is a great benefit to our clients.
The work of our Delaware office is comple- mented by Partner Mike Stocker of Labaton Sucharow’s New York office, who focuses on regulatory, corporate governance, and policy issues affecting investors.
a recent report released by the U.S. chamber of commerce’s Institute of Legal Reform discussing the increase in shareholder lawsuits in the wake of M&a deals being announced has highlighted the increasing trend of this type of litigation and asking congress to intervene through new legislation. Have you noticed an increase in M&a litigation?
There has indeed been an increase in M&A litigation in transactions of all sizes, but that increase is due in large part to a perfect storm of economic conditions that fosters transactions that are unfavorable to many shareholders. The recent appeal for legislative action is little more than a well-timed effort to stymie investor advocates when shareholder protections are needed most.
If so, to what do you attribute this increase?
Enormous amounts of capital have been sidelined by the fragile recovery of last four years, and share prices in many companies are still depressed when compared to historic values. These conditions, together with the increased presence of advisors who play a simultaneous role on both sides of transactions,