All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger.
The night of the middle of Sha'baan is among the blessed and virtuous nights. There are many Prophetic narrations confirming this fact. For instance, the Prophet said: "Allaah looks at His slaves during the night of the middle of Sha'baan, and forgives all His slaves except two: a person who has malice in his heart (against a Muslim) and a person who killed a soul (unjustly)." [Ahmad]
The Prophet also said: ''When the night of the middle of Sha'baan comes, Allaah looks upon His slaves, He forgives the believers, and gives respite to the disbelievers, and leaves those who have malice (against a Muslim) with their malice (and does not forgive them) unless they relieve themselves from malice." [Al-Bayhaqi]
As for performing prayers during this night, Ali narrated that the Prophet, sallallaahu ‘alayhi wa sallam, said: "When the night of the middle of Sh'abaan comes, then perform the prayer during its night…" [Ibn Maajah] However, the scholars classified this narration as weak, and Shaykh Al-Albaani said that it is fabricated.
Furthermore, Al-Ghazaali in “Al-Ihyaa'” and Abu Taalib Al-Makki in “Qoot Al-Quloob” said that during this night, 100 Rak'ahs should be performed. However, An-Nawawi said in “Al-Majmoo'” that it is an evil innovation and that the Prophetic narration that is mentioned about it is false, it is not valid to single out this night with special night prayers from among all other nights of the year.
Allaah Knows best.