Also known as: successful on the merits · prevailing party · judgment on the merits
Written by attorneys · grounded in primary & secondary sources — see below
A favorable final resolution of the substantive legal issues presented in a proceeding. The phrase identifies when a party has prevailed on the core claims or defenses rather than on procedural or technical grounds alone.
Selena Singh retained counsel under a contingent arrangement to recover unpaid royalties from Spectrum Financial. After extensive discovery the parties reached a $1.2 million settlement. Counsel then submitted a closing statement allocating the agreed percentage of the recovery to the firm. Because the matter concluded with a monetary recovery, the arrangement satisfied the outcome-based requirement and the fee became payable.
Mills Acquisition Co. sought a preliminary injunction to block a lock-up option granted by Macmillan to a competing bidder. The court examined the record and found no reasonable probability that Mills would ultimately prevail on its breach-of-duty claims. The injunction was therefore denied because the moving party had not shown the required likelihood of success on the merits.
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MITE Corp. challenged an Illinois takeover statute that imposed lengthy hearing requirements. The district court granted a preliminary injunction after concluding that MITE had demonstrated a reasonable probability of success on its claim that the statute was preempted by federal law. The injunction preserved the status quo pending final resolution of the constitutional issue.
Chris-Craft Industries sought injunctive relief to halt Bangor Punta's competing bid for Piper Aircraft. The court determined that Chris-Craft lacked standing to assert a private right of action under the Williams Act and therefore had not shown a probability of success on the merits. The requested injunction was refused.
MacAndrews & Forbes sought to enjoin Revlon's grant of lock-up and no-shop provisions to a white-knight bidder. The court found a reasonable probability that the Revlon board had breached its duty to maximize shareholder value once the company was for sale. The injunction issued because the plaintiffs demonstrated a likelihood of success on the merits of their fiduciary-duty claims.
American General challenged Unitrin's defensive share-repurchase program and poison pill. The Delaware Supreme Court held that the board's actions were reasonable in relation to the threat posed and therefore reversed the lower court's finding of a probability of success on the merits. The defensive measures remained in place.
The agreement must state whether expenses are deducted before or after the contingent fee is calculated and must notify the client of any expenses for which the client remains liable even if no recovery occurs.
No. Indemnification rights under statutes such as Delaware General Corporation Law section 145(c) ripen only upon final disposition or upon success on the merits or otherwise. A dismissal without prejudice does not constitute such success.
A preliminary injunction is an extraordinary remedy granted only when the moving party demonstrates a reasonable probability of ultimate success on the substantive claims together with irreparable harm and a balance of equities favoring relief.
…normally limited to the parties named in the instrument. Since a preliminary injunction may be granted on a mere probability of success on the merits, generally the moving party must demonstrate confidence in his legal position by posting bond in an amount sufficient to protect his adversary from loss in the event that future proceedings…