This decision has been widely reported as signaling the Court of Chancery’s intention to cut back on the wave of suits filed over almost every merger.
First, the Court held that the scope of any release will be affected by the value of the claims being released. Second, the Court cautioned that broad releases will no longer be the norm.
Whether this truly is a turning point remains to be seen. What is clear, however, is that the continuing criticism of M&A litigation settlements is having an effect on how the Court will react when asked to approve a settlement and fees.