Five former shareholders objected to the proposed settlement of an action for breaches of fiduciary duty relating to Bank of America’s acquisition of Countrywide. The objectors claimed the value of the derivative litigation was not duly considered by Countrywide’s board before the merger or by Plaintiffs’ counsel in valuing the litigation for purposes of settlement. This particular dispute revolved around the scope of discovery, with the objectors seeking broad discovery rights. The Court recognized constrained discovery rights in the objector context, requiring a showing of good cause to justify a broad grant of power. Here, the objectors were unable to make a showing of bad faith or incompetence. Accordingly, the Court granted the objectors’ motion to compel discovery to the limited extent necessary to specifically meet the reasonable needs of the objectors without unduly burdening any other party.
