Corporate Alert: Delaware Chancery Court Highlights Potential Liability of Target Company Directors for Material Misrepresentations in Mergers

Summary: In a recent opinion, Great Hill Equity Partners IV, LP v. SIG Growth Equity Fund I, LLLP, the Delaware Court of Chancery declined to dismiss claims of fraud and aiding and abetting against four directors related to alleged misrepresentations made by target company officers in connection with a merger. The court’s opinion provided guidance as to factual allegations sufficient to plead claims that directors and shareholders may have had knowledge of and/or aided an alleged fraud.