Delaware Business Litigation Report

Court Of Chancery Explains Disclosure Rules For Adviser Fees

In re Atheros Communications Inc. Shareholder Litigation, C.A. 6124-VCN (March 4, 2011)

This decision outlines what must be disclosed to shareholders asked to approve a merger.  As to the financial adviser giving a fairness opinion, the disclosures should include whether its fee is contingent on a closing and if so, how much of the fee is contingent. The amount of the fee should  also be disclosed.

The decision also held that when the CEO learned he would be employed by the acquiror, that should have been disclosed as well.

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