Archive: August 11, 2020

CHANCERY COURT HONORS SHAREHOLDER REPRESENTATIVE PROVISION HOLDING SELLING STOCKHOLDERS ARE NOT REAL PARTIES-IN-INTEREST

By: Shoshannah Katz and Claire Suni

In Fortis Advisors LLC, v. Allergan W.C. Holding Inc., C.A. No. 2019-0159-NTZ (Del. Ch. May 14, 2020), a shareholder representative appointed pursuant to a merger agreement asserted a claim on behalf of selling stockholders for certain contingent payments. The defendant surviving corporation brought a motion in the Delaware Court of Chancery (the “Court”) to (i) compel the selling stockholders to participate in discovery as parties-in-interest to the action and to be subject to trial subpoenas as parties or (ii) compel the shareholder representative to procure and produce discovery from the selling stockholders. The Court denied the motion in full.

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