Merger Closed, Lawsuit Lingers: A Warning for Healthcare Dealmakers

NEW YORK, NY – December 05, 2025 – Months after the ink has dried on Chevron’s monumental $60 billion acquisition of Hess Corporation, a legal echo of the deal continues to reverberate in a Delaware courtroom. Law firms representing a former Hess stockholder are now seeking up to $350,000 in fees, not for stopping the merger, but for compelling the company to release additional information before the deal was approved. While this battle unfolds in the energy sector, it serves as a crucial and timely case study for executives, investors, and legal teams navigating the high-stakes world of pharmaceutical and biotechnology M&A.

This dispute over a so-called “mootness fee” highlights a persistent feature of the corporate dealmaking landscape. It underscores how shareholder litigation can create lingering financial liabilities and strategic headaches long after a transaction is consummated. For an industry like healthcare, where mergers are frequently driven by complex intellectual property, clinical trial data, and opaque regulatory pathways, the lessons from the Assad v. Hess case are particularly poignant.

The Anatomy of a Mootness Fee Lawsuit

The legal saga began on May 2, 2024, when a Hess stockholder, George Assad, filed a lawsuit in the Delaware Court of Chancery. The complaint alleged that the Hess board of directors had breached its fiduciary duties by failing to disclose material information related to the Chevron merger in its proxy statement. The plaintiff sought to halt the transaction until this information was provided to shareholders.

This type of lawsuit is a common feature of major public M&A. Rather than engage in protracted litigation, and as is often the case, Hess chose a different path. On May 21, 2024, while expressly denying any wrongdoing and maintaining its original disclosures were legally sufficient, the company issued “Supplemental Disclosures” to its proxy statement. It did so, in its own words, to “avoid nuisance, potential expense and delay.”

With this new information in the public domain, the basis for the lawsuit effectively vanished, or became “moot.” The Hess shareholder vote proceeded as planned on May 28, 2024, the merger was approved, and the deal ultimately closed on July 18, 2025. However, the story didn't end there. The plaintiff's law firms, Acocelli Law and Long Law, LLC, argue that their legal action directly caused the release of this beneficial information to shareholders. Now, they are asking the court to award them fees for conferring this “corporate benefit,” with Chevron, as Hess's successor, on the hook to pay.

Delaware's Evolving Stance on Merger Litigation

The Delaware Court of Chancery, the premier venue for corporate law in the United States, has been wrestling with the proliferation of such cases for years. For a long time, M&A transactions were almost automatically followed by shareholder lawsuits alleging disclosure deficiencies. Many of these were resolved through “disclosure-only” settlements, where companies would agree to add often trivial information to their proxy statements and pay the plaintiffs' attorneys' fees in exchange for a broad release from all future claims related to the deal.

This practice came under heavy fire in the landmark 2016 ruling, In re Trulia, Inc. Stockholder Litigation. The court signaled its deep skepticism of such settlements, establishing a higher bar: to be approved, supplemental disclosures had to be “plainly material.” The decision effectively sought to stamp out frivolous litigation that served only to enrich lawyers while providing no real value to shareholders, a phenomenon often derided as a “merger tax.”

More recently, the 2023 decision in Anderson v. Magellan Health, Inc. tightened the standard even further for mootness fee applications. The court ruled that for plaintiffs' counsel to earn a fee, the supplemental disclosures they prompted must be both “material” and “legally required,” not merely “helpful.” In that case, the court awarded a modest $75,000 on a $1.1 million fee request, signaling a clear intent to reward only litigation that produces a genuine, tangible benefit for investors. This evolving standard forms the critical backdrop against which the Hess-Chevron fee dispute will be decided.

A $350,000 Question: What is a 'Benefit' Worth?

The central question before the court is whether the supplemental information Hess provided was truly material. Plaintiff's counsel will argue that their lawsuit was meritorious and compelled Hess to provide shareholders with critical information they needed to cast an informed vote on a $60 billion transaction. They will contend their efforts created a clear corporate benefit worthy of the $350,000 fee.

Conversely, Chevron will likely argue that the lawsuit was meritless and the supplemental disclosures were immaterial, provided only to dispense with the nuisance and cost of litigation. They will lean on Hess’s original statement denying any wrongdoing and the high bar set by the Magellan precedent. Their argument will frame the fee request not as compensation for a benefit conferred, but as the very “merger tax” the Delaware courts have sought to eliminate.

The requested amount of $350,000 falls into a gray area. It is significantly more than the $75,000 awarded in Magellan but aligns with some past awards where a more substantial benefit was found. The court's decision will therefore be a significant data point, offering a clearer picture of how much value Delaware now places on disclosures prompted by shareholder litigation in a post-Trulia and post-Magellan world.

Lessons for the Life Sciences M&A Arena

For stakeholders in the pharmaceutical, biotechnology, and medical device sectors, this case is more than a legal curiosity. The healthcare industry is a hotbed of M&A activity, and acquiring companies are frequent targets of disclosure-based lawsuits. In this context, the definition of “material” information can be profoundly complex. It could involve undisclosed data from a Phase II clinical trial, negative feedback from the FDA on a product's regulatory pathway, or internal financial projections that paint a less rosy picture of a drug's peak sales potential than what was presented to investors.

The outcome of the Hess-Chevron fee dispute will provide valuable insight for healthcare dealmakers. A significant award to the plaintiffs could embolden law firms to continue pursuing disclosure claims, even under Delaware's heightened standards. A denial or a nominal award, however, would reinforce the message from Magellan that the courts will not reward litigation that fails to produce a genuinely meaningful benefit for shareholders.

Ultimately, this legal skirmish serves as a stark reminder that M&A due diligence does not end at the deal's closing. The potential for post-merger litigation and associated costs must be factored into any transaction's risk profile. For healthcare companies contemplating a transformative acquisition, understanding the shifting sands of Delaware's corporate benefit doctrine is no longer just a matter for the legal department—it is a critical component of strategic and financial planning.