Griffith, Sean J.; Rickey, Anthony --- "Who collects the deal tax, where, and what Delaware can do about it" [2018] ELECD 1114; in Griffith, Sean; Erickson, Jessica; Webber, H. David; Winship, Verity (eds), "Research Handbook on Representative Shareholder Litigation" (Edward Elgar Publishing, 2018) 140

Book Title: Research Handbook on Representative Shareholder Litigation

Editor(s): Griffith, Sean; Erickson, Jessica; Webber, H. David; Winship, Verity

Publisher: Edward Elgar Publishing

ISBN: 9781786435330

Section: Chapter 9

Section Title: Who collects the deal tax, where, and what Delaware can do about it

Author(s): Griffith, Sean J.; Rickey, Anthony

Number of pages: 16

Abstract/Description:

This chapter focuses on Delaware’s efforts to crack down on disclosure-only settlements. The authors test one theory of plaintiff law firms: that there are “white hat” and “black hat” firms, that is, firms that bring meritorious cases and firms that bring weak ones. They find evidence consistent with the existence of “black hat” firms, but also evidence that “white hat” firms may in fact be “gray,” filing strong cases in Delaware and weaker cases outside it. To deal with the problem of “gray hat” behavior, the authors suggest that Delaware probe lead counsel applicants’ conduct outside of Delaware in making lead counsel appointments. Delaware can use its unique position as the center of corporate law to assure that meritorious cases continue to be brought there.