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Even if the merger objection litigation suits are disregard and we use instead a projected year-end 2017 total of 264 traditional lawsuits, that would imply a traditional lawsuit litigation rate of 5.74%, which again would far exceed the 2016 litigation rate for traditional lawsuits of 3.9%.
This implied litigation rate for traditional filings is more than double the 1997-2015 average annual litigation rate for traditional securities lawsuits of 2.8%.
The 93 federal court merger objection lawsuits filed in just the first six months of 2017 already is more than the 80 federal court merger objection lawsuit filed in all of 2016.
The surge in the number of federal court merger objection lawsuit filings is a direct result of a series of Delaware state court rulings, culminating in the January 2016 ruling in the case, in which a series of Delaware judges evinced their hostility to the type of disclosure only settlements that frequently characterize the resolution of merger objection lawsuits.
Semiannual Filings Levels: Despite the slight slowing in this year’s second quarter, the 225 first half securities suit filings far exceeds the number of securities suits filed in any half year period since 1996.
During the period 1996-2016, the semiannual period with the highest number of securities suit filings was the second half of 2016, when there were 148 filings.
The Rate of Litigation: It is not just the sheer number of securities suits filed in the first half of 2017 that is noteworthy; the of litigation is arguably even more striking.
Indeed, the 225 filings in the first half of 2017 are already nearly 20% greater than the 1996-2015 full-year average.
There were a total of 44 securities suits filed in March; the number of filings in April fell by half to 22.
The drop off of filings in April accounts for almost all of the difference in the number of filings between the first quarter and the second quarter.
The merger objection suits represented 48% of all securities suit filings in the just-completed second quarter.
The flood of merger objection lawsuit filings seems to be increasing.As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters.