Material Adverse Effects

News & Analysis as of

Return of the MAC – Material Adverse Change Clauses Making a Comeback in Oil and Gas Deals

For many years, US and UK M&A practices have differed in their use of material adverse change clauses (MACs) in sale and purchase documents. Common, even ubiquitous in the US, these clauses, which permit a buyer to refuse to...more

The principal legal effects of Brexit on commercial contracts in Morocco

Financial analysts remain uncertain about the potential effects on the global economy of the United Kingdom’s anticipated exit from the European Union (Brexit). ...more

UK Litigation in a Post Brexit World

As in so many other areas, the effect of the decision to leave the European Union in the referendum on 23 June 2016 on litigation in England and Wales in still highly uncertain. There are a number of issues that the UK...more

Is Brexit “materially adverse” to you? Perhaps, if it triggers an ‘event of default’ under your agreement(s).

While the impact of the EU referendum decision on outstanding financing transactions is still to be determined, both lenders and borrowers may be wondering if the ramifications of Brexit have or could be considered to...more

Brexit - Flexit Clauses

There has been plenty of commentary about how the Brexit debate is impacting corporate, commercial, finance and real estate transactions. In the media there have been reports of “market jitters” surrounding the possibility of...more

Revisiting the Material Adverse Effect Clause in Upstream Transactions

Oil prices have plunged by about one-third in the past 90 days and this past week oil fell for five consecutive days and dropped approximately 10 percent for the week. While many think that prices are at the bottom, others...more

Maine BEP Provisionally Adopts DEP's Proposed Revisions to Site Law Rules

On October 2, 2015, we reported on the Maine Department of Environmental Protection’s (DEP’s) proposal to revise three chapters of its rules under the Site Location of Development Law (Site Law), the statute under which the...more

The English Court’s Approach to interpretation of Material Adverse Effect provisions

The English High Court recently considered whether a downward revision of a profit forecast would constitute a “material adverse effect” within the parameters of the provision agreed on by the parties in the share purchase...more

Market Volatility - Reducing Bid Risk in Australia

If a takeover bidder's share price falls materially, can the bidder withdraw its bid or lower its bid price? If not, how can the bidder protect itself in a volatile market? Under Australian rules, a bidder cannot...more

Developers: Beware of Disparate Impact After Supreme Court Ruling

Following the Supreme Court’s decision in Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project, state agencies and real estate developers should carefully consider the effects of their low-income...more

Considerations with Regard to “Material Adverse Effect” Clauses

In the mergers and acquisitions context, there is a risk that the occurrence of some event between signing and close may cause the value of the target to diminish significantly, making the deal no longer attractive to the...more

Making “Material Adverse Change” Mean What You Choose It to Mean — Neither More nor Less

A recent decision by the Court of Chancery of Delaware provides a reason to pause before agreeing to standard, boilerplate “material adverse change” clauses in purchase agreements. In Osram Sylvania, Inc. v. Townsend...more

Black Friday Needs to Start Really Early: Risk of Material Adverse Effect

Warning shoppers—or, rather, sellers: a company’s failure to meet sales forecasts may amount to a material adverse effect. In Osram Sylvania Inc. v. Townsend Ventures, LLC, Osram Sylvania Inc. (OSI), a stockholder of...more

Key Differences Between European and US Private Equity Transactions

Munich-based partner Jörg Kirchner and NY-based partner Eli Hunt discuss four key ways that private equty transactions in European and the US tend to differ. Kirchner, a Global Co-chair of Latham & Watkins’ Corporate...more

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