Delaware Chancery Chief Cracks Down on ‘Mootness’ Fee Requests

The chief judge of Delaware’s Chancery Court sent a shot across the bow of deal lawyers bringing frivolous cases, warning Thursday that the country’s premier forum for M&A disputes will no longer let them collect a “merger tax.”

Chancellor Kathaleen St. J. McCormick issued an unusual 37-page opinion in a case involving Centene Corp.'s $2.2 billion acquisition of Magellan Health Inc. The ruling clarified the legal framework for handing out “mootness” fees to shareholder attorneys who challenge a transaction, only to quickly drop the case when supplemental disclosures are filed.

“For the avoidance of doubt, Delaware policy does not encourage ...