Court Approves Disclosure-Only Class Action Settlement

On March 24, 2017, Justice Kornreich of the New York County Commercial Division issued a decision in Roth v. Phoenix Companies, Inc., 2017 NY Slip Op. 27099, approving a disclosure-only class action settlement. Discussing the controversial issue of disclosure-only settlements, the court explained:

As an initial matter, as noted on the record, the Settlement is outstanding. It provides for expeditious beneficial relief for the class that affords them material remedial disclosures without the need for protracted, costly litigation. While disclosure-only settlements resolving pre-merger lawsuits are the subject of much controversy and often properly viewed with a fair degree skepticism, this case lacks the pernicious indicia of a frivolous strike suit seeking a merger tax. Here, the gravamen of plaintiff's complaint is a challenge to the disclosure implications of the merger, which the court finds to have been well-founded. The terms of the Settlement sufficiently remedy plaintiff's concerns. Thus, under the five traditional class action settlement approval factors, as well as the two new factors recently announced by the First Department, the Settlement in this case easily passes muster.

(Internal quotations and citations omitted).