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    09.19.14 Professor Minor Myers Details New Perspectives on Stockholder Litigation
    Minor Myers

    Professor Minor Myers, who focuses his scholarship on corporate governance and stockholder litigation, recently co-authored a new article forthcoming in the Ohio State Law Journal exploring whether the merits matter in suits brought by stockholders to challenge mergers. Together with Professor Charles Korsmo of Case Western Reserve University School of Law (formerly a Visiting Professor at BLS), Myers concluded that traditional fiduciary duty class actions challenging mergers are not associated with various proxies for legal merit.

    The new article is a comparative analysis of, on one hand, stockholder class actions alleging a board’s breach of fiduciary duty and, on the other, stockholder suits seeking an appraisal under Delaware law. After examining the substantial structural differences of these two types of litigation, the article examines what factors are associated with litigation.

    Reviewing appraisal-eligible mergers over the last decade, Professors Myers and Korsmo focused on how two criteria – deal size and expected stockholder premium – were related to the incidence of both types of litigation. They find that fiduciary duty class actions were strongly associated with transaction size but not strongly associated with merger premium. The most natural interpretation is that the plaintiffs’ attorneys bringing the suits target deep pockets, regardless of whether fiduciary duty claim has merit. By contrast, appraisal actions were found more likely to be meritorious and more correlated with stockholder premium than deal size.

    Read a blog post by Professors Meyers and Korsmo summarizing their findings here.

    The full article is forthcoming in the Ohio State Law Journal and can be read online here.