Delaware Court Respects Plain Meaning of Merger Agreements; Allows Private Equity Sponsor to Avoid Reverse Termination Fee

more+
less-

The recent Delaware Chancery Court decision in Alliance Data Systems Corp. v. Blackstone Capital Partners V, L.P. and Aladdin Solutions, Inc. provides a strong pronouncement on the effectiveness of private equity deal structures. The deal structure at issue involved the formation of a separate "shell" acquisition subsidiary and the private equity sponsor of the buyer agreeing to provide a reverse termination fee payable to the target. This type of structure is intended to ensure that the private equity sponsor is not itself held contractually liable for obligations (including those of the acquisition subsidiary) under the merger agreement, other than for the obligation to guarantee payment of the reverse termination fee.

Please see full newsletter for more information.

LOADING PDF: If there are any problems, click here to download the file.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Manatt, Phelps & Phillips, LLP | Attorney Advertising

Written by:

more+
less-

Manatt, Phelps & Phillips, LLP on:

JD Supra Readers' Choice 2016 Awards
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
×
Loading...
×
×