The Court of Chancery recently issued a short letter ruling in Swomley v. Schlecht, C.A. No. 9355-VCL (Del. Ch., March 12, 2015), summarizing the notice and hearing procedure requirements set forth in In re Advanced Mammography Sys., Inc. S’holders Litig., 1996 WL 633509 (Del. Ch. Oct. 30, 1996) and In re Zalicus, Inc. S’holders Litig., 2015WL 226109 (Del. Ch. Jan 16, 2015).
The opinion provides an instructive summary of the process involved and reasoning behind the notice and hearing required when a settlement is reached in a class or derivative action and (i) the parties agree that the defendants have taken action sufficient to render the action moot and (ii) plaintiffs’ counsel receives a fee in light of the benefits conferred by contributing to the action taken by the defendants.