The Delaware Supreme Court ruled on Thursday that a large investor should be allowed to opt out of a shareholder class action settlement, making it potentially more difficult for companies to end litigation.
The court reversed a the lower Court of Chancery and ruled that a large holder of shares of Celera Corp must be allowed to pursue their claims for "substantial" monetary damages relating to the company's sale to Quest Diagnostics Inc.
Delaware's Court of Chancery is a major venue for shareholder class actions challenging mergers and acquisitions. The lawsuits almost always end in settlements and rarely provide for opt-outs by those shareholders who oppose the settlements.
The case stems from the 2011 acquisition of Celera by Quest for $680 million.
The deal was opposed by BVF Partners LP, which argued in letters to Celera's board that the company was undervaluing its drug royalties. BVF had nearly a quarter of Celera's stock by the time the deal closed on May 17, 2011.
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