Stockholders may seek to enjoin a vote or closing based on disclosure deficiencies or fiduciary breaches. Courts weigh irreparable harm against the risk of losing the transaction entirely.
Disclosure-only settlements have been curtailed.
Alternative Names:
Merger Injunction|Preliminary Deal Injunction
Why it Matters?
Delaware's rejection of disclosure-only settlements in Trulia substantially reduced these filings, since the court declined to approve settlements exchanging supplemental disclosures for broad releases and fee awards. Filings migrated to federal court under securities disclosure theories and to mootness fee demands. Enjoining a transaction remains rare because courts weigh the risk that stockholders lose a premium against disclosure deficiencies that can be cured.
Frequently Confused with
Related terms
Frequently asked questions
What did Trulia change?
Are transactions actually enjoined?
