United Rentals Denied Specific Performance, Cerberus Walks: Use of Forthright Negotiator Principle Serves as Cautionary Tale to M&A Professionals


On December 21, 2007, following a two-day trial, Chancellor William B. Chandler III of the Delaware Court of Chancery denied the request of United Rentals, Inc. (URI), for specific performance of its merger agreement with the acquisition entities controlled by private equity firm Cerberus Capital Management, L.P. (Cerberus). Chancellor Chandler held that specific performance was not an available remedy under the merger agreement, and therefore URI could not compel the Cerberus acquisition entities to complete the acquisition, leaving collection of the $100 million reverse termination fee as the only remedy available to URI.

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