Delaware courts face new challenges as world events drive shifting priorities in the M&A market

Despite the ongoing effects of the pandemic, 2021 was another active year for the Delaware courts, according to Hogan Lovells' quarterly 2022 Securities, Shareholder, and M&A Litigation Outlook, published today.

"The Delaware courts addressed a number of important issues, at times breaking new ground and making new law," said Hogan Lovells partner Ryan Philp, Editor of the Outlook. "Many of these decisions will continue to shape Delaware law and the courts' docket in 2022."

Key issues addressed by the courts include the impact of COVID-19 on M&A transactions, the boundaries of 'Caremark' claims, and appraisal actions. In addition, the Delaware Supreme Court adopted a new universally applicable test for demand futility.

"2021 has demonstrated that the Delaware courts are not hesitant to review core doctrines and make necessary changes – or jettison prior cases entirely," Philp said. "Looking to 2022, we believe Caremark claims are likely to continue to be an area of interest, and ESG-related issues also may crop up as stockholders and regulators continue to focus on them."

Hogan Lovells partner Jon Talotta, Leader of the firm's Securities, Shareholder and M&A Litigation Group added: "The courts in 2022 are also likely to face new challenges arising from important developments on the transactional side, such as the implications from the rise in the use of SPACs in M&A transactions, and increased regulatory scrutiny of deals from the Federal Trade Commission and Department of Justice."

The report can be accessed here.

Accompanying the Outlook are a series of podcasts in which members of Hogan Lovells' Securities, Shareholder and M&A Litigation Group discuss key legal developments and their likely impact going forward.