In Re Dynegy Inc. Shareholders Litigation, C.
A. No. 5739-VCS (Del. Ch. Mar, 16, 2011), read letter ruling here. This
three-page letter decision is short on length but long on potential
significance. It should be read as a postscript to the report of the Special
Counsel in Scully v. Nighthawk that was highlighted here
earlier this week.
This ruling dismissed as moot a Delaware class action
that was initially filed to challenge a merger but was not prosecuted because
"Counsel for the Delaware Action agreed to coordinate with Texas Counsel
and jointly prosecute the Texas Action on behalf of all class members".
The Court rejected the argument that there were "no costs or burden to
Defendants to keeping this case open" in light of the litigation not being
active. The Court explained that: "So long as a case remains open, the
parties and the court must attend to it. There are costs to the public of
maintaining files and of taking staff and judicial time in ensuring that an
action is eventually resolved."
In further support of its dismissal, the Court reasoned
that: "Plaintiffs are not entitled to file placeholder actions,
choose not to prosecute them at all, and to keep them on file because they
perceive that gives them some leverage in litigation elsewhere".
This decision implicates the following issues which
also, at least tangentially, relate to the Scully Special Counsel
report. (Links to scholarship on these issues are included as part of
the Scully post here.)
Read more Delaware business
litigation case summaries and commentary on Delaware
Corporate and Commercial Litigation Blog, a blog hosted by Francis G.X.
Pileggi, of Fox Rothschild LLP.
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