Mootness Fees' in Deal Litigation: An Argument for a Different Approach

Much has been written about the ‘‘demise’’ of disclosure-only settlements in Delaware. In disclosure-only settlements defendants agree to make supplemental—often marginal and arguably immaterial—disclosures in advance of shareholder votes in exchange for broad ‘‘intergalactic’’ releases, followed by a fee application by plaintiffs’ counsel for creating the disclosure ‘‘benefit.’’ The mounting skepticism about, and disfavor of, such settlements and fee awards in the Delaware Court of Chancery culminated most recently in Chancellor Bouchard’s rejection, in In re Trulia Inc. Stockholder Litigation, 2016 BL 17194, of a disclosure-only settlement, and the court’s adoption of a strict standard requiring that supplemental disclosures address a plainly material misrepresentation.