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US: Judge emerges as toughest M&A watchdog

By  |  July 15, 2014

The Delaware Court of Chancery is arguably the most influential business court in the nation, according to reports, and hears more cases related to mergers and acquisitions lawsuits than any other. Now, Vice Chancellor J. Travis Laster, who has spend nearly five years on the court, is emerging as the top watchdog over M&A disputes.

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    Laster’s reputation has been built on challenging both plaintiffs and defendants, shooting down settlements, and lambasting advisers regarding the cases that challenge some of the largest deals. That reputation is only expected to grow, reports say, amid the latest M&A boom.

    According to reports, last year 94 percent of all mergers were followed by shareholder lawsuits on grounds that takeover prices were too low. But in recent months, Laster has cracked down on settlements made by merging companies to quell shareholders by disclosing more information and paying lawyers in order to close their transactions.

    He has also held a strong grip on bankers, reports say. Last March Laster found RBC Capital Markets liable for “behind-the-scenes maneuvering” during the bank’s 2011 acquisition of Rural/Metro. In 2011, Laster slammed Barclays for manipulating the sale of Del Monte Foods to earn higher fees, reports say.

    Now, experts predict more high-profile lawsuits to follow the high-profile mergers that have been announced, including Comcast’s acquisition of Time Warner Cable, AT&T’s acquisition of DirecTV, and Sprint’s expected acquisition of T-Mobile, among other multibillion-dollar transactions.

    Full content: Wall Street Journal

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