By: K. Tyler O'Connell
ABA Business Law
In the October 2015 edition of the American Bar Association Business Law Section’s Business Law Today, Partner Tyler O’Connell co-authors an article on Reducing the “Deal Tax”: Delaware’s Recent Scrutiny of Nonmonetary Settlements.
The surge in litigation over public company mergers has led to an increase in nonmonetary settlements that yield fee awards for plaintiffs’ counsel, global releases for defendants, and little benefit for stockholders. This article discusses what some have characterized as a “deal tax” on M&A activity and recent decisions in the Delaware Court of Chancery that may reduce the “tax” by increasing scrutiny of nonmonetary settlements, as well as potential implications and consequences of these decisions.