News & Analysis as of

Mergers Contract Termination Contract Terms

Roetzel & Andress

Planning for the Unexpected: How Unwind Agreements Help Medical Practices

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If your medical practice is considering joining a larger group or hospital, it’s important to ask: what if the new relationship doesn’t work out? In some situations, an unwind agreement can provide a path back to...more

Cooley LLP

Diving Into Delaware’s Enforcement of Specific Performance in M&A Transactions

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Most M&A agreements include specific performance provisions that allow either party, under certain circumstances, to seek to have a court force the other party to comply with its contractual obligations. In M&A deals, a...more

Morris James LLP

Chancery Refuses to Order Specific Performance Due to Inaccurate Representations and Warranties

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Restanca, LLC v. House of Lithium, Ltd., C.A. No. 2022-0690-PAF (Del. Ch. Jun. 30, 2023) - The parties seeking specific performance of an agreement must establish a clear right to performance, including that all conditions...more

Herbert Smith Freehills Kramer

Delaware Court of Chancery Holds That ‘Effect of Termination’ Provision Bars Party Who Terminated Merger Agreement From Also...

In its recent decision in Yatra Online, Inc. v. Ebix, Inc., Case No. 2020-0444-JRS, 2021 WL 3855514 (Del. Ch. Aug. 30, 2021) (Slights, V.C.), the Delaware Court of Chancery dismissed plaintiff’s breach of contract and other...more

Goodwin

Survival Guide to Structuring Life Sciences Partnering and M+A Agreements

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The life sciences space is ever-growing and dynamic as the industry witnesses more companies and, therefore, more collaboration, licensing and M&A agreements, come into the spotlight. While these deals are exciting...more

Herbert Smith Freehills Kramer

Sustained or Transitory? Delaware Court of Chancery Finds No MAE Absent Proof of Durationally Significant Effect on Business

Prior to the Delaware Court of Chancery’s opinion in Akorn, Inc. v. Fresenius Kabi AG, C.A. No. 2018-0300-JTL, 2018 WL 4719347 (Del. Ch. Oct. 1, 2018), aff’d 198 A.3d 724 (Del. 2018), no Delaware court had found the existence...more

Kilpatrick

Monthly Minute | Due Diligence Considerations Related to COVID-19

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Once a month, we cover an interesting topic with a short video. This month, Associate Sarah Beth Barnes discusses due diligence considerations related to COVID-19....more

Skadden, Arps, Slate, Meagher & Flom LLP

Anthem/Cigna Litigation Underscores Importance of Antitrust Planning in Transactions

On August 31, 2020, the Delaware Chancery Court issued an opinion in litigation between Anthem and Cigna related to the contract in their terminated merger. In its sprawling 306-page opinion, the court detailed a “corporate...more

Harris Beach Murtha PLLC

Will COVID-19 Qualify as a ‘Material Adverse Effect’?

The pandemic and associated lockdown orders changed economic projections virtually overnight. As a result, organizations which were under contract at the onset of COVID-19 – e.g., to merge with or acquire another entity or...more

Vinson & Elkins LLP

[Webinar] Navigating Heightened Contractual Risk in an Economic Downturn - May 28th, 12:00 pm - 1:00 pm CT

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We’re excited to introduce Navigating, a new webcast series created to assist clients and friends of the firm in navigating the new normal – whether that be navigating through pandemic-related issues, new industry dynamics,...more

McDermott Will & Schulte

[Webinar] Preparing for Litigation Resulting from a COVID-Related Busted Deal - May 8th, 12:00 pm - 1:00 pm EST

Uncertainty continues to loom over the M&A market as organizations that were actively involved in transactions before the COVID-19 pandemic assess risks stemming from reduced valuations, condensed financing options, the...more

Akin Gump Strauss Hauer & Feld LLP

The Coronavirus and M&A Transactions: MAE Clauses

In late 2019, COVID-19 (more commonly known as the coronavirus) began to spread throughout mainland China, and has since spread around the world, affecting numerous lives and businesses. As a result, companies spanning a wide...more

Dorsey & Whitney LLP

Channel Reinforces that Akorn is the Ceiling not the Floor for MAE Terminations

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2018’s landmark decision Akorn, Inc. v. Fresenius Kabi AG marked the first time that the Chancery Court upheld a buyer’s use of a Material Adverse Effect (MAE) clause to terminate a merger agreement. However, the Court’s...more

Foley & Lardner LLP

Evaluating Transfers and Terminations in Increasingly Consolidated Reseller Networks

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Over the past few years, many manufacturing industries have faced a new trend: reseller (i.e., distributor or dealer) consolidation within channel networks. From the manufacturer’s standpoint, there is clear upside to this...more

Cadwalader, Wickersham & Taft LLP

The Delaware Court of Chancery Enforces Clear and Unambiguous Terms of Merger Agreement in Finding Termination Fee Provision Did...

The Delaware Court of Chancery’s recent decision, Genuine Parts Company v. Essendant Inc., provides a helpful reminder that Delaware courts will enforce the clear and unambiguous terms of a merger agreement, and will consider...more

Proskauer Rose LLP

When Mergers Go Bad: How Merger Agreements Deal with Antitrust Risk in Today’s Market

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When parties begin merger talks, it is with an eye toward getting the deal done, getting the sellers their consideration, and determining how the combined company can do a better job for customers, employees and shareholders....more

Skadden, Arps, Slate, Meagher & Flom LLP

Court of Chancery Rules That ‘Commercially Reasonable Efforts’ Obligation Does Not Imply a ‘Duty to Warn’

Recent Delaware decisions in Williams Companies v. Energy Transfer Equity, L.P., and Akorn, Inc. v. Fresenius Kabi AG, examined contract provisions requiring “commercially reasonable efforts” and “reasonable best efforts” and...more

Morris James LLP

Chancery Declines to Extend Rent-A-Center Merger Agreement, But Questions Request for Termination Fee

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Vintage Rodeo Parent, LLC v. B. Riley Financial, Inc., C.A. No. 2018-0927-SG (Del. Ch. Mar. 14, 2019). The merger agreement at issue in this case included provisions permitting extensions or terminations to account for...more

Skadden, Arps, Slate, Meagher & Flom LLP

Delaware Supreme Court Affirms Akorn

On December 7, 2018, the Delaware Supreme Court affirmed the Court of Chancery's decision in Akorn, Inc. v. Fresenius Kabi AG , C.A. No. 2018-0300-JTL, which upheld, for the first time under Delaware law, the ability of a...more

Fenwick & West LLP

Akorn v. Fresenius: Important Practical Lessons from First-Ever Material Adverse Effect

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On October 1, in Akorn v. Fresenius Kabi, the Delaware Court of Chancery for the first time found that a material adverse effect — or MAE — had occurred in a merger transaction, which, combined with other breaches of the...more

Dorsey & Whitney LLP

MAE is MIA No Longer: Delaware Court Upholds Use of “Material Adverse Event” Clause for the First Time

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In Akorn, Inc. v. Fresenius Kabi AG, the Delaware Chancery Court held that Fresenius, a German pharmaceutical company, was justified in invoking a “material adverse event” (MAE) clause to terminate its $4.8 billion merger...more

Foley & Lardner LLP

Akorn v. Fresnius Kabi: Delaware Court Provides Guidance on What Constitutes a Material Adverse Event

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A Delaware Chancery Court has allowed a buyer to cancel a deal based on a material adverse effect. The decision is believed to be the first of its kind in Delaware. In Akorn, Inc. v. Fresenius Kabi AG, the Delaware Court...more

Bennett Jones LLP

Delaware Judge Finds Elusive MAC—Does It Change Anything?

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Purchasers of businesses often want an "escape hatch" prior to closing if the target business suffers a "material adverse change" (or a "material adverse effect"). Historically, based on court decisions primarily out of the...more

A&O Shearman

Delaware Court Of Chancery Rules For The First Time That MAE Justifies Termination Of Deal

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In a first-of-its-kind ruling, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery ruled post-trial that Fresenius SE & Co. KGaA (“Fresenius”) properly terminated its $4.3 billion agreement to acquire Akorn,...more

Wilson Sonsini Goodrich & Rosati

Delaware Court of Chancery Finds a Material Adverse Effect and Permits Termination of Merger Agreement

In a 246-page post-trial decision issued this week, the Delaware Court of Chancery ruled that a buyer could terminate a $4.75 billion public company acquisition because of material adverse effects that had occurred at the...more

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