The Delaware Court of Chancery opinion styled:  In re PLX Technology Inc. Stockholders Litigation, Cons. C.A. No. 9880-VCL (Del. Ch. April 18, 2022), described its opinion as a public service.  It addressed the payment logistics and administration for the settlement of a class action.  An impasse arose because the Depository Trust Company (“DTC”) implemented a policy that required the recipients of the payments to sign a letter agreeing to certain provisions before DTC would distribute the settlement proceeds.  This put the administrator in the untenable position of being required to distribute settlement proceeds through DTC when DTC refused to proceed without the letters, and some recipients refused to sign those letters.

The court approved a revised procedure to distribute the settlement proceeds and explained that:

  “The court has issued this decision largely as a public service announcement.  Corporate litigators need to be familiar with the bug in this particular settlement technology and understand the fix.”

Slip op. at  2.

When the Court of Chancery makes an announcement that it states: “corporate litigators need to be familiar” with, smart practitioners will pay attention.  The court’s announcement of a “fix to a bug,” makes it important to include on this blog.  The above link provides access to the entire opinion which is required reading for any corporate litigator involved in the distribution of settlement proceeds in a Delaware class action case.