Litigation

Limited Discovery Allowed For Objectors to Class Action Settlement

By Francis G. X. Pileggi, Esq.

In the Chancery Court case of In re Countrywide Corp. S'hldrs Litig., 2008 WL 4173839 (Del. Ch., Sept. 10, 2008), the objectors to a proposed class action settlement were allowed limited discovery. One of the arguments of the objectors was that the directors that may have been personally liable on the derivative claims had personal motives for agreeing to a merger that may have allowed them to escape liability. The objectors complained that the proposed settlement did not take into account adequately the value--and preservation--of the derivative claims, and that failure demonstrated bad faith on behalf of the plaintiffs.

The Court tailored limited discovery that was focused on allowing the objectors to evaluate the fairness of the settlement without overly burdening the other parties to the suit.

Full post as published by Delaware Corporate and Commercial Litigation Blog on September 21, 2008 (boomark / email).