The Delaware Court of Chancery determined that it would enter an order approving a proposed settlement of a long-running derivative action in 60 days unless objectors to the settlement posted a bond in the amount of the value of the proposed settlement ($13.25M) and applied to take over the case prior to such time. If the objectors posted the bond, pursued the underlying derivative claims and recovered less than $13.25 million, then the nominal defendant would have the ability to execute on the bond for the amount of the shortfall. The Court explained that its novel approach was intended to balance the risk of losing the settlement against the possibility that the settlement consideration was inadequate.
