M&A Lawsuits Skyrocket as Fee-Hungry Law Firms Smell Easy Money

Class-action lawsuits alleging boards of directors fell asleep on the job while signing off on buyouts have become nearly as ubiquitous in today's M&A world as bankers and second-guessers. Within five hours of announcing it reached a $2.8 billion leveraged buyout deal last month, for example, BJ's Wholesale (BJ) was greeted by five different law firm “investigations” into whether or not the company's board breached its fiduciary duties by not properly shopping for a better deal. The flurry of legal activity surrounding the BJ's deal is becoming par for the course. According to Securities Class Action Services, there were 341 M&A lawsuits filed last year in the U.S., up 78.5% from 2009 and an incredible 847% from 2008. Continue reading the article.