In re Trulia Inc. Stockholder Litigation
Delaware Court of Chancery
129 A.3d 884 (2016)
After Zillow agreed to acquire Trulia in a stock-for-stock merger, Trulia stockholders (plaintiffs) sued alleging the Trulia directors (defendants) undervalued the deal, and within four months — after only minimal discovery involving no ruled-upon motions, fewer than 3,000 pages of documents, and just three depositions — the parties agreed to settle: Trulia would make additional pre-vote merger disclosures and pay up to $375,000 in attorneys' fees, while stockholders received no financial compensation but the directors received a release of all merger-related claims.
Is a settlement under which stockholders receive only supplemental disclosures about a proposed merger fair and reasonable if the disclosures do not address a plainly material misrepresentation or omission, and the subject matter of the proposed release of claims is not narrowly circumscribed to encompass nothing more than disclosure claims and fiduciary claims concerning the merger process?