Edgio Leaders Lose Novel Ruling in Apollo Deal Challenge Case

Edgio Inc. board members must defend claims the digital media platform’s merger with an Apollo Global Management Inc. affiliate was a pretext for measures aimed at staving off shareholder activism, a Delaware judge said in a novel ruling.

Vice Chancellor Morgan T. Zurn let the case move forward against six members of Edgio’s nine-seat board, saying it’s plausible the deal’s purpose was to protect them amid takeover rumors. Apollo, which got a 35% stake in the combined company as part of the merger, isn’t named as a defendant.

Zurn, writing Monday, acknowledged that investors signed off on the transaction. But ...