Recently filed derivative suits now proceeding in both Delaware and Texas which challenge the $21 billion merger involving El Paso and Kinder Morgan again raise the issue of merger litigation involving Delaware companies being filed outside Delaware. Alison Frankel of Thomson Reuters writes here about whether the suits will proceed in Delaware or Texas or both. She refers to a lecture that Stanford Professor Joseph Grundfest gave in which he proposed a solution to multi-jurisdiction contests by means of provisions in charters that include forum selection clauses for shareholder litigation, as we described here and here. Additional commentary on this topic is available here.
Her article also addresses the question of how the court picks lead counsel from among competing plaintiffs in parallel derivative cases which are not governed by the federal statute applicable in securities class actions. Delaware courts have addressed these issues as noted in recent posts on this blog here and here.
Supplement: Professor Larry Ribstein, often cited in Delaware court decisions, graciously refers to this post here, and links to his scholarship on the issues raised in this post relating to choice of forum and corporate governance. The good professor also links to the burgeoning evidence that Delaware is losing cases involving Delaware law that are being filed in other jurisdictions.