Chancery Rejects Class Action Settlement
In TD Banknorth Shareholders Litigation, (Del. Ch., July 19, 2007), read opinion here, the Chancery Court rejected a class action settlement related to the acquisition by the Toronto-Dominion Bank of the remaining publicly-held shares of the TD Banknorth. Here is court's own summary of its main reasons for rejecting the settlement:
The review procedure employed at this time requires the court to decide whether, in the exercise of its own business judgment and in light of the facts and circumstances presented, the proposed settlement is a fair and reasonable resolution to this litigation. Based on the record submitted, and aware of its duty to not become a fact-finder in the present context,5 the court concludes that the plaintiffs unreasonably failed to press legitimate legal claims against the defendants before consenting to the settlement. As a result, the class members appear to have received insufficient consideration in the form of a token cash increase in the merger price, a virtually meaningless change in the calculation of the vote, and several proxy disclosures for which the plaintiffs cannot even wholly claim credit.
