COURT OF CHANCERY

OF THE

STATE OF DELAWARE

MORGAN T. ZURN

VICE CHANCELLOR

LEONARD L. WILLIAMS JUSTICE CENTER

500 N. KING STREET, SUITE 11400

WILMINGTON, DELAWARE 19801-3734

October 6, 2023

Gregory V. Varallo, Esquire

Bernstein Litowitz Berger & Grossman LLP

500 Delaware Avenue

Suite 901

Wilmington, DE 19801

Rudolf Koch, Esquire

Richards, Layton & Finger, P.A.

One Rodney Square

920 North King Street

Wilmington, DE 19801

RE: In re Edgio, Inc. Stockholders Litigation,

 Consol. C.A. No. 2022-0624-MTZ

Dear Counsel:

I write regarding the parties’ settlement stipulation (the “Stipulation”) and 

proposed scheduling order, both of which were filed on September 29, 2023.

1

 As 

is typical with proposed settlements in this Court, the parties seek entry of the 

scheduling order, which “tentatively approves the form and content of the notice 

and sets forth the manner in which notice is to be given.”

2

 The Stipulation 

contemplates notice by publication in lieu of mailing, and the defendants filed a

letter in support.

3

 As explained below, the Court is amenable to service by 

1 Docket Item (“D.I.”) 61 at Stipulation for Compromise & Settlement [hereinafter 

“Stip.”]; D.I. 61 at Proposed Order.

2 2 Donald J. Wolfe & Michael A. Pittenger, Corporate and Commercial Practice in the 

Delaware Court of Chancery § 13.03[e], at 13-23 (2nd ed. 2022) [hereinafter “Wolfe & 

Pittenger”]; D.I. 61 at Proposed Order ¶ 10.

3 D.I. 62 at Ltr.
In re Edgio, Inc. S’holders Litig.

Consol. C.A. No. 2022-0624-MTZ

October 6, 2023

Page 2 of 11

publication if the parties provide additional information as to why publication is

appropriate under the circumstances. Additionally, the notice to stockholders, 

attached as Exhibit C to the Stipulation (the “Notice”), is inadequate because it 

does not set forth the plaintiffs’ theory of the case. The parties must submit a 

revised notice before the Court will approve the proposed scheduling order.

I. Notice By Publication

I begin with the parties’ request that I allow notice exclusively by 

publication, as set forth in paragraph 10 of the Stipulation. That paragraph 

provides:

(i) Defendants shall cause Edgio[, Inc.] to file a Form 8-K with the 

SEC that discloses the Settlement and attaches a copy of the Notice 

and this Stipulation as exhibits; (ii) Defendants shall cause Edgio to 

post a copy of the Notice and this Stipulation on Edgio’s website; (iii) 

Co-Lead Counsel shall post a copy of the Notice and this Stipulation

on the website of Bernstein Litowitz Berger & Grossmann LLP; and 

(iv) Defendants shall cause Edgio to post a copy of the Notice on 

Edgio’s social media accounts on LinkedIn, X (formerly Twitter), 

Facebook, and Instagram.4

4 Stip. ¶ 10.
In re Edgio, Inc. S’holders Litig.

Consol. C.A. No. 2022-0624-MTZ

October 6, 2023

Page 3 of 11

Court of Chancery Rule 23 requires that parties notice a “proposed dismissal 

or settlement . . . in the manner directed by the Court.”

5

 “Notice may be given by 

any appropriate means approved by the Court, including first-class U.S. mail, 

email, or publication.”

6

 “Delaware courts will interpret the notice requirement so 

that it does not unduly burden the parties.”

7

 

Notice by mail supplemented by additional forms of notice will often satisfy

Rule 23’s requirements.

8

 But mailing notice can be expensive and impose an 

5 Ct. Ch. R. 23(f)(3). Rule 23 was amended on September 25, 2023. In re: Amendments 

to Rules 7, 10, 17–25, and 171 of the Court of Chancery Rules, Sections, III, IV, and XVI

(Del. Ch. Sept. 25, 2023) (ORDER).

6 Ct. Ch. R. 23(f)(3)(C).

7 1 R. Franklin Balotti & Jesse A. Finkelstein, The Delaware Law of Corporations & 

Business Organizations § 13.19[B], at 13-115 (4th ed. Supp. 2023-1).

8 See 2 David A. Drexler et al., Delaware Corporation Law and Practice § 42.05[2], at 

42-46 to -47 (2022) [hereinafter “Drexler”] (“Customarily, after a stipulation of

settlement is filed, the parties submit and the Court enters a scheduling order which: . . . 

directs the notice be mailed to stockholders, and in some instances be published or

otherwise disseminated by a specific date . . . .”); see also 7B Charles A. Wright & 

Arthur R. Miller, Federal Practice & Procedure § 1797.6 (3d ed. Apr. 2023 update)

[hereinafter “Wright & Miller”] (“Of course, notice by mail to all of the identified class 

members informing them of the proposed action and indicating that they have a right to 

participate and voice their objections will suffice.”); Qian Xiong Lin v. DJ’s Int’l Buffet 

Inc., 2019 WL 5842798, at *5 (E.D.N.Y. Nov. 7, 2019) (“The typical methods for 

disseminating notice to putative collective action members are through the United States 

mail and by posting hard copies at Defendants’ place of business.”).
In re Edgio, Inc. S’holders Litig.

Consol. C.A. No. 2022-0624-MTZ

October 6, 2023

Page 4 of 11

unnecessary burden where notice by publication would be adequate.

9 The Court 

may order notice by publication where notice by mail does not confer sufficient

benefits to outweigh its relative cost. To aid the Court in making that 

determination, Rule 23 provides that “[t]he parties must provide the Court with 

information sufficient to rule on whether to require notice and in what form.”

10

 

And the parties must show that notice by publication would “reach the majority of 

interested stockholders.”

11

 

Our case law provides examples of the ways parties can make this showing. 

One consideration is the cost of mailing,

12 which is best evaluated against the 

9 See 2 Wolfe & Pittenger § 12.03, at 12-35 (“Where the class is large, compliance with 

this notice requirement can be an expensive undertaking.”).

10 Ct. Ch. R. 23(f)(3)(B).

11 In re Madison Square Garden Ent. Corp. S’holders Litig., 2023 WL 3696664, at *2 

(Del. Ch. May 26, 2023) (internal quotation marks omitted) (quoting In re Wells Fargo & 

Co. S’holder Deriv. Litig., 445 F. Supp. 3d 508, 517–18 (N.D. Cal. 2020)).

12 See Madison Square Garden, 2023 WL 3696664, at *1 (requiring notice by mail to 

record stockholders and considering the “modest” cost of “between $75,000 and 

$83,876”); Franchi v. Barabe, C.A. No. 2020-0648-KSJM, at D.I. 50 (Del. Ch. May 3, 

2022) (ORDER) (allowing notice by publication and reasoning “roughly $30,000” in 

mailing costs would be meaningful to the company); Rux v. Meyer, C.A. No. 11577-CB, 

at D.I. 95 (Del. Ch. Oct. 23, 2009) (ORDER) (allowing notice by publication and 

considering that “a mailing would involve printing and mailing of an estimated 340,000 

notices at cost of several hundred thousand dollars (plus brokerage search costs)”); see 

also 7C Wright & Miller § 1839 (“If there is an extremely large number of stockholders 

so that the cost of mailing the notice would be burdensome, the court may decide to allow 

the notice to be published in appropriate newspapers or periodicals.”).
In re Edgio, Inc. S’holders Litig.

Consol. C.A. No. 2022-0624-MTZ

October 6, 2023

Page 5 of 11

company’s size and financial condition.13 Another consideration is whether the 

company has historically communicated with its stockholders via mail, or if it 

frequently uses electronic means.

14

 The Court has also considered the extent to 

which the proceedings are covered by the press,

15 the percentage of shares held by 

institutions as opposed to individuals,

16 and the trading volume of the company’s 

13 See Thiele v. Kashiv Biosciences, LLC, C.A. No. 2022-0272-LWW, at D.I. 64 (Del. 

Ch. May 15, 2023) (ORDER) (allowing notice by publication and considering the 

company’s market capitalization of $566 million); Franchi, C.A. No. 2020-0648-KSJM, 

at D.I. 50 (allowing notice by publication in part because the company was “a small 

clinical-stage biotechnology company”).

14 Madison Square Garden, 2023 WL 3696664, at *1 (requiring notice to record holders 

by mail and considering that the company “‘does occasionally communicate with 

stockholders of record by paper mail as appropriate,’ including providing ‘proxy 

statements to record holders by paper mail’” (citation omitted)); Thiele, C.A. No. 

2022-0272-LWW, at D.I. 64 (allowing notice by publication and considering that the

company “does not normally distribute paper materials to its stockholders but 

communicates through the ‘notice only’ option offered by the SEC to avoid the cost and 

expense of mailing, which has successfully produced a quorum for annual meetings”); 

Franchi, C.A. No. 2020-0648-KSJM, at D.I. 50 (allowing notice by publication and 

considering that the company “routinely communicates with stockholders through the 

‘notice only’ option provided by the SEC, which has successfully produced [a] quorum”).

15 See In re AMC Ent. Hldgs., Inc. S’holder Litig., 2023 WL 5165606, at *16 (Del. Ch. 

Aug. 11, 2023); City of Monroe Emps.’ Ret. Sys. v. Murdoch, C.A. No. 2017-0833-AGB, 

at D.I. 17 (Del. Ch. Nov. 28, 2017) (ORDER) (“Given the significant amount of press 

attention this settlement has received, the Court is satisfied with the manner of providing 

notice set forth in paragraphs 6–7 and will not require a mailing.”).

16 Dollens v. Goosehead Ins., Inc., C.A. No. 2022-1018-JTL, at D.I. 17 (Del. Ch.

Oct. 3, 2023) (ORDER) (allowing notice by publication where approximately 99% of the 

defendant’s stock was held by institutional investors); AMC, 2023 WL 5165606, at *16

(“The Company distributed notice electronically and by publication: on AMC’s investor 

relations website, on AMC’s Twitter account, via a Form 8-K, over PR Newswire, and on 
In re Edgio, Inc. S’holders Litig.

Consol. C.A. No. 2022-0624-MTZ

October 6, 2023

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stock.

17

 Additionally, the parties should explain why they have chosen the forms

of notice they seek.18 Armed with this information, the Court can consider whether 

the proposed forms of notice are sufficient under the circumstances. 

Here, the defendants argue that mailing should not be required because (1) 

“[a]s a technology company, Edgio’s stockholders frequently receive

communications about the company through notice by publication”; (2) Edgio is “a 

modestly sized public company”; (3) the expense of mailing “would burden Edgio 

financially and there is no reason to believe it would provide any meaningful 

countervailing benefit”; and (4) “the nature of the settlement, including the lack of 

payment to stockholders, further supports the position that notice by publication is 

appropriate in light of the likely costs of effecting notice by mail.”

19

 The 

Depository Trust Company’s Legal Notice System. In most instances, for publicly traded 

companies with a higher percentage of institutional stockholders, this is enough [for 

beneficial holders].” (footnote omitted)).

17 Madison Square Garden, 2023 WL 3696664, at *1 (allowing notice by publication to 

beneficial stockholders and considering that the company “averages trading volumes in 

the hundreds of thousands of shares per day”).

18 See In re AMC S’holder Litig., Consol. C.A. No. 2023-0215-MTZ, at D.I. 175 at 3–5

(Del. Ch. Apr. 28, 2023).

19 D.I. 62 at Ltr. at 3–4. The defendants also cited the former version of Rule 23.1 as the 

governing standard for this class action governed by Rule 23.
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October 6, 2023

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defendants note that Edgio has 224,956,212 shares of common stock outstanding

and 246 stockholders of record.20

These broad statements, unsupported by any facts, have not provided the 

Court “with information sufficient to rule on whether to require notice and in what 

form,” as required by our rules.21 First, it is not clear what types of

communications Edgio stockholders have received through electronic means or 

what those means were; the fact that Edgio is itself a “technology company” does

little to inform how it has historically communicated with its stockholders.

Second, an argument that mailing is too expensive should be supported by

information about the company’s size and market capitalization; Edgio merely 

refers to itself as “modestly sized.”

22

 Third, that argument should also be 

supported by an estimated cost of mailing notice, and postcard notice, to Edgio’s

20 Id. at 4 n.1.

21 Ct. Ch. R. 23(f)(3)(B).

22 The Stipulation provides that the “Defendants shall pay any and all Notice Costs 

regardless of the form or manner of notice ordered by the Court.” Stip. ¶ 11. For 

purposes of this letter, and consistent with the phrasing of the defendants’ letter, I assume 

that Edgio will incur the mailing expenses. See 2 Wolfe & Pittenger § 13.03[e], at 13–25

(“Typically, the corporate defendant undertakes the task and expense of mailing the 

requisite notice of settlement to stockholders or class members.”).
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record and beneficial stockholders.

23 Fourth, it is unclear how the “nature of the

settlement” supports forgoing notice by mail. If the defendants contend the Court 

should consider the nature of the settlement, they should explain their position and 

state the legal basis for it.

The parties must also provide support for their chosen forms of notice. First 

and foremost, they should inform the Court whether notice by email would be 

feasible, and if not, why.

24

 The parties must also explain why posting on their 

respective social media accounts is likely to reach a significant portion of Edgio’s 

stockholders; relevant information might include whether Edgio communicated

with its stockholders on the specified social media platforms. 

The Court is amenable to allowing notice by publication. Once the parties 

provide additional information, the Court will determine whether the proposed 

means are appropriate under the circumstances.

23 At times, the Court requires settlement notices to be sent to only record stockholders.

See In re Activision Blizzard, Inc. S’holder Litig., 124 A.3d 1025, 1061 (Del. Ch. 2015). 

The parties should provide separate cost estimates for sending notice to record and 

beneficial stockholders.

24 Madison Square Garden, 2023 WL 3696664, at *1 (explaining the Court previously 

sent a letter to the parties asking if “giving notice by email or social media would be a 

viable option”).
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October 6, 2023

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II. The Notice Is Inadequate As Currently Drafted.

Additionally, the Notice is inadequate. Court of Chancery Rule 23(f)(D)(iv)

requires that, “[u]nless the Court orders otherwise, the notice of a proposed 

dismissal or settlement must clearly and concisely state, in plain, easily understood 

language[,] . . . a summary of the claims, issues, defenses, and relief that the class 

action sought,” among other things.25

Here, the complaint’s theory is that Edgio’s board of directors caused Edgio 

to acquire College Parent, L.P. and enter into a stockholders’ agreement as part of 

a scheme to entrench itself in the face of an activist threat.26 That is also the theory 

that the parties briefed and argued at the motion to dismiss stage.27 My motion to 

25 Ct. Ch. R. 23(f)(3)(D); see also 2 Drexler § 42.05[3], at 42-47 (“[T]he notice must 

disclose the nature of the action as set forth in the pleadings, the evidence, [and] the 

positions taken by the parties . . . .” (citing Prince v. Bensigner, 244 A.2d 89, 92 (Del.

Ch. 1968)); 2 Wolfe & Pittenger § 13.03[e], at 13-26 (“[Notice] is sufficient if the notice 

outlines the pleadings, the evidence assembled, and the parties’ claims and positions

. . . .”).

26 See, e.g., D.I. 1 at Compl. ¶ 80 (“[T]he Director Defendants breached their fiduciary 

duties to Plaintiff and the Class by prioritizing their own personal, financial, and/or 

reputational interests and approving the Acquisition and the Stockholders’ Agreement, 

which they used to entrench themselves . . . .”).

27 See, e.g., D.I. 25 at 1 (“The Complaint alleges an unusual claim that garden-variety 

standstill provisions entered into pursuant to a stock issuance approved by independent 

directors and disinterested stockholders are per se entrenchment devices that merit 

enhanced scrutiny.”); D.I. 29 at Ans. Br. 2 (“[T]he Board used [provisions in the 

stockholders’ agreement] to entrench themselves in office.”).
In re Edgio, Inc. S’holders Litig.

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October 6, 2023

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dismiss ruling held that “it [was] reasonable to infer that the Board negotiated for 

and obtained [provisions in the stockholders’ agreement] to defend against a 

perceived threat of activism” and that “Unocal enhanced scrutiny applie[d] at the 

pleading stage.”

28 While the Notice explains the stockholders’ agreement’s 

relevant terms, it describes the underlying action only as “asserting a claim for 

breach of fiduciary duty in connection with the Board’s approval of the [College 

Parent] Acquisition and the Stockholders’ Agreement.”

29

 The only reference to the 

motion to dismiss decision reads, in full: “On May 1, 2023, the Court issued a 

Memorandum Opinion denying the Motion to Dismiss.”

30 The Notice’s discussion 

of the relevant claims and issues does not tell stockholders what the plaintiffs 

claimed the defendants did wrong. It falls short of Rule 23’s requirements.

31

 The 

parties must amend the Notice to provide a summary of the claims and issues in the 

case.

28 In re Edgio, Inc. S’holders Litig., 2023 WL 3167648, at *17 (Del. Ch. May 1, 2023)

(discussing Unocal Corp. v. Mesa Petroleum Co., 493 A.2d 946 (Del. 1985)). 

29 Stip., Ex. C ¶ 10; see also id. ¶ 11 (same).

30 Id. ¶ 19.

31 Ct. Ch. R. 23(f)(3)(D).
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October 6, 2023

Page 11 of 11

III. Conclusion

If the parties wish to proceed with their request to notice the settlement by 

publication in lieu of mailing, they must provide additional information to enable 

the Court to assess whether such notice is appropriate under the circumstances. 

The Court will require that notice be given at least sixty days in advance of the

hearing currently scheduled for December 15, 2023. If the parties intend to keep 

that date, they should provide this information and made the requested revisions as 

soon as possible.

Sincerely,

/s/ Morgan T. Zurn 

Vice Chancellor

MTZ/ms

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