Leveraged Buyout

News & Analysis as of

Dell Decision Grants Claimants Fair Value Award Above Merger Price

Delaware law has long made clear that the price established for a company in a market transaction, while a relevant factor, does not necessarily equate to the fair value that shareholder claimants are entitled to receive in...more

Delaware Chancery Court Rejects MBO Merger Price as Best Evidence of Fair Value in Appraisal Proceeding

In In re Appraisal of Dell Inc., No. 9322 VCL, 2016 Del. Ch. LEXIS 81 (Del. Ch. May 31, 2016) (Laster, V.C.), the Delaware Court of Chancery determined that the fair value of the common stock of Dell Inc. (“Dell” or the...more

Making the Safe Harbors Safe Again - United States Court of Appeals for the Second Circuit Holds That State Law Constructive...

The Bankruptcy Code contains “safe harbors” that, among other things, exempt transfers made in connection with certain financial contracts, including securities contracts, from avoidance by the bankruptcy trustee as...more

Second Circuit Limits Creditors’ Ability to Claw Back LBO Payments

A recent decision by the U.S. Court of Appeals for the Second Circuit, In re Tribune Company Fraudulent Conveyance Litigation,1 represents a significant victory for shareholders who may get cashed out in connection with a...more

Bankruptcy & Financial Restructuring/Finance Advisory: Second Circuit Rejects Potential Loophole in the Securities Contract Safe...

The Second Circuit Court of Appeals recently held that the “safe harbor” protections for securities contracts in Section 546(e) of the Bankruptcy Code prevented individual creditors’ state law constructive fraudulent transfer...more

Tranquil Waters Once Again in the Safe Harbor: Bankruptcy Safe Harbor Protects Shareholders From State Constructive Fraud Claims

Shareholders who received nearly $8 billion from the Tribune Company leveraged buyout (LBO) do not have to give back that money as a constructive fraudulent transfer. Although the possibility remains that the creditors can...more

Ever-Expanding Safe Harbor Leaves Creditors’ Claims Stranded at Sea

Second Circuit holds that Bankruptcy Code preempts creditors’ state law constructive fraud claims. On March 29, 2016, the Second Circuit issued its opinion in In re Tribune Company Fraudulent Conveyance Litig.,...more

Second Circuit Holds that State Law Constructive Fraudulent Transfer Claims Brought By Individual Creditors are Preempted under...

On March 24, 2016, the U.S. Court of Appeals for the Second Circuit (the “Court”) ruled that former shareholders of the debtor Tribune Media Company (“Tribune”), who were cashed out in a leveraged buyout (“LBO”), would be...more

A reset for debt in 2015?

At the beginning of 2015, it was believed that the high yield bond and leveraged loan markets would continue at the levels seen in 2014. Issuance had peaked and terms were loosening. Indeed, the first quarter started...more

"Bankruptcy Court Tightens Intentional Fraudulent Transfer Pleading Requirements"

On November 18, 2015, the U.S. Bankruptcy Court for the Southern District of New York dismissed intentional fraudulent transfer claims asserted by a bankruptcy litigation trustee against former shareholders of Lyondell...more

Corwin v. KKR Financial Holdings LLC, No. 629, 2014 (Del. Oct. 2, 2015) (Strine, C.J.)

In this opinion affirming the Court of Chancery’s dismissal of a stockholder challenge to a merger, the Delaware Supreme Court held that the approval of the merger by a fully informed, disinterested stockholder majority...more

CLIENT ALERT: Delaware Supreme Court Finds That Fully Informed Stockholder Vote Approving Merger Invoked Business Judgment Rule

Corwin v. KKR Financial Holdings LLC, No. 629, 2014 (Del. Oct. 2, 2015). In this opinion affirming the Court of Chancery’s dismissal of a purported class action challenging an acquisition transaction, the Delaware...more

Delaware Court Holds Interested Directors Liable for "Fairer Price" In Going Private Transaction

In one of the largest ever M&A-related recoveries for shareholders, Vice Chancellor J. Travis Laster ordered Dole Food Company, Inc.’s Chairman and CEO, David Murdock, and Dole’s former President, COO and General Counsel, C....more

Energy Future Holdings – Another Major Success for Chapter 11 Mediation?

Mediation has become an invaluable tool in large chapter 11 cases. Traditionally viewed as a means for resolving discrete disputes between a debtor’s estate and an adversary party, in recent years mediation in certain complex...more

Third Circuit Recognizes that “Structured Dismissal” Deviating from the Bankruptcy Code’s Priority Scheme May Be Used to Conclude...

On May 21, 2015, the United States Court of Appeals for the Third Circuit, in a 2-1 opinion, recognized a Chapter 11 bankruptcy case could be dismissed through a “structured dismissal” that deviates from the priority scheme...more

Is Your Baby Your Buyer’s Collateral?

Even before dealing with the intricacies of nondisclosure agreements, employment offer letters, stock restriction agreements, and incentive plans, it is not unusual for founders to have already dreamt of an IPO or sale event....more

Global Private Equity Outlook

In this report: - Introduction - Overview - Deal Process - Portfolio Strategies - Cross-Border Dealmaking - Exits - Fundraising - Conclusion - Private Equity...more

The Leveraged Finance Revolution Continues

Through 2009-12, sponsors would have to work hard to pull together clubs of banks to finance midmarket acquisitions, refinancing opportunities were scarce and the bond market (whilst open) was the preserve of larger deals....more

Attacking LBO Payouts as State Law Fraudulent Transfers

The United States Bankruptcy Court for the Southern District of New York (the “Court”) in Weisfelner v. Fund 1 (In Re Lyondell Chemical Co.), 2014 WL 118036 (Bankr. S.D.N.Y. Jan. 14, 2014) recently held that the safe harbor...more

Lyondell: Is the Safe Harbor Closed to Former Shareholders of LBOs?

In a recent decision by the United States Bankruptcy Court for the Southern District of New York, Weisfelner, v. Fund 1, et al. (In re Lyondell Chem. Co.), 2014 Bankr. LEXIS 159 (Bankr. S.D.N.Y. January 14, 2014), the Court...more

Bankruptcy Court defines limits of shareholder safe harbor in failed leveraged buyouts

An opinion issued in connection with the bankruptcy cases of Lyondell Chemical Company and its affiliates may have significant implications for shareholders who receive payments in connection with a leveraged buyout when the...more

The 2013 Amendments to the Delaware General Corporation Law [Video]

Pepper partner Matthew Greenberg was interviewed by Jane Searle of The Deal about recent changes to Delaware law that will affect acquisitions of public companies, including the increased use of tender offers and trends...more

SEPTA v. Volgenau, C.A. No. 6354-VCN (Del. Ch. Aug. 5, 2013) (Noble, V.C.)

In this opinion, the Court of Chancery granted defendants' motion for summary judgment as to all counts of a stockholder class action complaint, which alleged breaches of fiduciary duty by corporate directors and a...more

Delaware Court Provides Critical Guidance as to the Commercial Reasonableness of a UCC Article 9 Foreclosure Sale

Secured lenders often resort to non-judicial foreclosure sales of personal property upon a borrower’s default. Article 9, Part 6 of the Uniform Commercial Code requires that every aspect of such a sale must be commercially...more

SDNY Finds Direct Payments to Shareholders in a LBO Are Safe Harbored Under Section 546(e) of the Bankruptcy Code

On November 7, 2012, Judge Lewis A. Kaplan for the United States District Court of the Southern District of New York held that payments made in connection with a leveraged buyout to holders of privately held securities were...more

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