Shareholder litigation challenging corporate mergers continues to rise, and some Pennsylvania attorneys say that their state offers corporate boards more protection from such suits than Delaware does.

One of the contrasts between the states is that under Pennsylvania corporate law, directors are permitted to consider other constituencies besides shareholders, including employees and customers, when evaluating acquisition offers. Delaware law holds that it is a board’s responsibility to maximize shareholder value above all.

“Pennsylvania’s different,” said M. Norman Goldberger, who heads Ballard Spahr’s Securities Litigation practice. The whole idea behind the Pennsylvania statues is to allow board to make decisions that are more difficult to make in Delaware….the two states have different values. Shareholder advocates say the price per share is the paramount value, but employees are going to say it’s good to take into account different constituencies.”