Legal News

Delaware Supreme Court Allows Plaintiff to Opt Out from Class-Action
Download PDF

Litigation for businesses became more difficult from Thursday, as the Delaware Supreme Court ruled that a big investor could opt out of a shareholder class action settlement. With such rights of plaintiffs, who are party to class-action, being recognized by the Delaware Supreme Court, companies can find it incredibly difficult to settle issues with blanket settlements, as the sought after target of ending litigation through settlement can elude them.

In a matter involving Celera shareholders that arose after Celera was purchased in 2011 by Quest for a sum of $680 million, the Delaware Supreme Court ruled that BVF Parners LP, which owned close to a quarter of Celera’s stock, could opt out of class-action settlement with other shareholders and pursue litigation on its own.

BVF had been against the acquisition deal from before its inception and had repeatedly observed in letters to Celera’s board, before finalization of the acquisition deal, that the company was undervaluing its drug royalties.


While BVF was contending the matter with Celera’s board, another shareholder, the New Orleans Employees’ Retirement System went to court alleging Celera had breached its fiduciary duties to shareholders by selling cheap.

However, within weeks of filing its lawsuit, the pension fund settled with Celera by making several changes that did not do justice to the rights of other shareholders. Other shareholders did not receive any money under that settlement to justify relinquishment of their legal claims.

BVF challenged that the pension fund did not measure up as a proper class representative of Celera shareholders affected by the acquisition, but its objections were overruled by the Court of Chancery. BVF appealed, and the Delaware Supreme Court ruled in its favor.

Get JD Journal in Your Mail

Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!

The Delaware Supreme Court case is In Re Celera Corporation Shareholder Litigation No. 212, 2012


Most Popular

Legal Career Resources

October 19, 2016 Not Everyone Is Fit to Work in a Law Firm

Summary: Law firm work is not meant for everyone no matter what kind of credentials you have, so figure out now if you should be pursuing another career. Read Three Simple Ways to Tell If You Should Work (or Continue […]

read more


To Top