How Sell-Side Advisors Can Reduce Litigation Risk in Light of Delaware’s Rural/Metro Decision
On March 7, 2014, Vice Chancellor Laster of the Delaware Court of Chancery found RBC Capital Markets, LLC liable for damages for aiding and abetting breaches of fiduciary duty by the directors of Rural/Metro Corporation in connection with the company’s 2011 sale to an affiliate of Warburg Pincus LLC. (See In re Rural Metro Corp. Stockholders Litig., C.A. No. 6,350-VCL.) Rural/Metro is one of a series of recent Delaware holdings, including the April 8, 2014 decision in the case of In re Occam Networks Stockholders Litig. (C.A. No. 5,878-VCL), that are likely to increase post-closing litigation risk for both target directors and for their advisors.