The Dynamics of Disclosure Claims

February 16, 2012

Event| Corporate Transactions| Corporate & Chancery Litigation

Over the last several years, the Delaware Court of Chancery has increasingly been willing to grant expedited discovery and injunctive relief, and approve awards of plaintiffs’ attorneys’ fees, with respect to disclosure claims alleging inadequate disclosure of financial projections and the results of the financial analyses underlying fairness opinions. The panel will discuss how the dynamics of those disclosure claims—including the procedural posture and risk/reward analysis of a potential appeal by defendants—are causing outside counsel to recommend increasingly detailed disclosure of such information in merger proxies and notices of appraisal rights.

The panel, which includes Richards Layton associate Blake Rohrbacher, will discuss the following topics:

  • Are projections, including projected free cash flows, required to be disclosed?
  • What level of detail regarding the financial analyses underlying fairness opinions is required to be disclosed?
  • How does the procedural posture and remedies awarded for such disclosure claims limit the likelihood of appeal?
  • What are the practical implications of the foregoing when advising boards of directors and financial advisors?