News & Analysis as of

Breach of Contract Merger Agreements

Morris James LLP

Chancery Determines Pharmaceutical Company Complied with Merger Agreement’s Requirement To Use Commercially Reasonable Efforts

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Himawan v. Cephalon, Inc., C.A. No. 2018-0075-SG (Del. Ch. Apr. 30, 2024) - Stockholder representatives of an acquired corporation brought claims alleging that defendants had failed to use contractually-required...more

Morris James LLP

Court of Chancery Dismisses Aiding And Abetting Fraud Claim Against Corporate Officers And Directors On Grounds That A Corporation...

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Urvan v. AMMO, Inc., Consol. C.A. No. 2023-0470 PRW (Del. Ch. Feb. 27, 2024, corrected Mar. 14, 2024) - It is an axiom of Delaware law that a corporation acts through its human agents. This principle informs the causes of...more

Morris James LLP

Delaware Supreme Court Affirms Busted-Deal Decision and Attorneys’ Fees for Contingency Fee Based Representation

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Energy Transfer LP v. The Williams Companies, Inc., No. 391, 2022 (Del. Oct. 10, 2023) - Busted-deal litigation is commonplace in Delaware and often requires Delaware courts to interpret provisions in merger agreements...more

McGuireWoods LLP

Delaware Court of Chancery Questions Enforceability of Con Ed Provisions

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So-called Con Ed provisions emerged as M&A practitioners’ response to Consolidated Edison, Inc. v. Northeast Utilities, a 2005 case in which the 2nd U.S. Circuit Court of Appeals held that stockholder plaintiffs did not have...more

Morris James LLP

Chancery Denies Specific Performance in De-SPAC Transaction Based on Difficulty of Enforcement and Plaintiff’s Inequitable Conduct

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26 Capital Acquisition Corp. v. Tiger Resort Asia Ltd., CA No. 2023-0128-JTL (Del. Ch. September 7, 2023) - Even where the parties have contractually agreed that specific performance is the preferred remedy for a breach,...more

Stikeman Elliott LLP

Choose Your Words Carefully: Three Recent Earnout Cases Under Delaware Law

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When the prospects of an acquired business are uncertain, an earnout can bridge the valuation gap between buyer and seller and help get the deal done. Taking this route is not without risk, however, particularly where...more

Morris James LLP

Chancery Denies Sellers’ Claim Against Buyers for Failure to Close, Finds That Sellers’ Award of “Phantom Equity” to Former...

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HControl Holdings LLC vs. Antin Infrastructure Partners S.A.S., C.A. 2023-0283-KSJM (Del. Ch. May 29, 2023) - In Delaware, buyers bear the burden of proving by a preponderance of the evidence their claims for breach of a...more

Kramer Levin Naftalis & Frankel LLP

HControl Holdings v. Antin Infrastructure Partners: Terminating a Merger Agreement for Immaterial Breach (and Other Holdings)

A recent posttrial decision from Delaware regarding an alleged breach of a capitalization representation in a merger agreement is noteworthy. The decision establishes that a party is within its rights to back out of a deal...more

Kramer Levin Naftalis & Frankel LLP

Case Alert: AluminumSource, LLC v. LLFlex, LLC

A recent post-trial decision from Delaware regarding alleged breaches of representations and warranties in an asset purchase agreement is noteworthy. First, the decision highlights how buyers may not be able to rely on...more

Woodruff Sawyer

M&A Insurance: 2023 First Quarter Roundup

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With March now squarely in the rearview mirror, we thought it was time to look at the first quarter of 2023 from a historical perspective in terms of pricing and retentions and to discuss some emerging trends....more

Wyrick Robbins Yates & Ponton LLP

Yonder Window Breaks: Earnout Covenants in Acquisitions

Earnouts, which provide sellers payouts if certain post-closing milestones are reached, have become increasingly popular in recent M&A transactions given today’s uncertain regulatory and financial climate.  Inflation, supply...more

J.S. Held

[Webinar] Post-Merger & Acquisition Dispute Resolution - December 7th, 12:30 pm - 1:30 pm EST

J.S. Held on

Global Investigations expert Frank Lazzara, CPA, CFF, ABV, CFE, and Economic Damages & Valuations expert David Golbahar, CPA, CFF, CGMA, will present a one-hour* course, which will cover: - An overview of purchase price...more

Woodruff Sawyer

R&W Claims 101: Types of Claims

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Representations and warranties (R&W) insurance covers a breach of the reps and warranties contained in the purchase agreement governing a merger or acquisition. Since reps and warranties insurance policies are...more

Dorsey & Whitney LLP

Hell-or-High-Water Clauses in Uncertain Regulatory Times

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​​​​​​​In a deal market as uncertain as this one, we have seen transactional lawyers more frequently resorting to pushing what are known as “hell or high water” clauses - clauses that obligate parties to take “any and all...more

Morgan Lewis - Power & Pipes

Real-World Litigation Impacts of Contract Clauses in Energy Contracts: The Power of Merger Clauses

If you’ve ever been involved in negotiating a contract, whether for the provision of services or a $200 million energy transaction, you’ve likely seen a merger clause. They are typically universal in their use and, while the...more

Farrell Fritz, P.C.

“So What?”: Twitter Resists Merger Agreement Termination by Invoking Musk’s Unclean Hands

Farrell Fritz, P.C. on

Elon Musk has lobbed in two additional termination letters since his original July 8 letter seeking to terminate his agreement to acquire Twitter for $44 billion.  Each termination letter cites alleged false representations...more

Morris James LLP

Court Rejects Franchisor’s Attempt Based on Business Effects of COVID-19 to Escape Contractual Obligation to Purchase Franchisee’s...

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Level 4 Yoga, LLC v. CorePower Yoga, LLC, C.A. No. 2020-0249-JRS (Del. Ch. March 1, 2022) - In this post-trial decision, the Court of Chancery awarded specific performance to Plaintiff/franchisee who sought to enforce...more

Hicks Johnson

The Basics: Implied Covenant of Good Faith and Fair Dealing Under Delaware Law

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Under Delaware law, the implied covenant of good faith and fair dealing attaches to every contract by operation of law and is best understood as an implied term. The purpose of the doctrine is to ensure that parties deal...more

Adler Pollock & Sheehan P.C.

Twitter Fingers and Delaware’s Court of Chance(ry)

In a seemingly Hollywood marriage, Elon Musk—the Chief Executive Officer of Tesla and SpaceX (“Mr. Musk”)—stated he is terminating his agreement to purchase Twitter, Inc. (“Twitter”) for $54.20 per share or about $44 billion...more

Goodwin

Twitter Brings Suit Against Musk in Delaware Court of Chancery Seeking Specific Performance

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On July 12, 2022, Twitter, Inc. brought a civil action in the Delaware Court of Chancery against Elon Musk, the co-founder and CEO of Tesla Motors, Inc., for breach of contract in an attempt to force Musk to complete his...more

Morris James LLP

Court of Chancery Holds That Exclusive Remedy Provisions Alone Are Not Enough To Bar Fraud Claims Based On Extra-Contractual...

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Fortis Advisors LLC v. Johnson & Johnson, C.A. No. 2020-0881-LLW(Del. Ch. Dec. 13, 2021) - Delaware public policy respects freedom of contract, but it is also intolerant of fraud. These dueling policy aims are often pitted...more

Jones Day

COVID-19 and Merger Litigation: Takeaways After Two Years

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Before the pandemic, it was generally accepted that establishing an MAE was very difficult—indeed, only one case in Delaware, 2018's Akorn v. Fresenius Kabi, had ever found that an MAE occurred. Following the pandemic, this...more

Stikeman Elliott LLP

“Commercially Reasonable Best Efforts”: B.C. Court Provides Guidance in Context of Purchase and Sale Contract

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In Sutter Hill Management Corporation v. Mpire Capital Corporation (Sutter), the British Columbia Court of Appeal found that the acquiror of an Abbotsford, B.C. care home had breached the purchase and sale agreement by...more

Morris James LLP

Chancery Applies Plain Language of a Merger Covenant To Dismiss Acquirer’s Untimely Indemnification Claim and Deny Sellers’...

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Supernus Pharms., Inc. v. Reich Consulting Grp., Inc., C.A. No. 2020-0217-MTZ (Del. Ch. Oct. 29, 2021) - Supernus Pharmaceuticals, Inc. acquired biotech startup Biscayne Neurotherapeutics, Inc. pursuant to a 2018 merger...more

Morris James LLP

Chancery Dismisses Implied Covenant Claim For Former Stockholders’ Alleged Improper Demands That Company Take Actions To Achieve...

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Pacira Biosciences, Inc. v. Fortis Advisors LLC, C.A. No. 2020-0694-PAF (Del. Ch. Oct. 25, 2021) - There generally cannot be a claim under the implied covenant of good faith and fair dealing for conduct that is addressed...more

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