Litigation developments: core M&A and corporate governance doctrines
Will COVID-19 Qualify as a ‘Material Adverse Effect’?
MAE Clauses: Troutman Sanders and Pepper Hamilton COVID-19 Litigation Podcast Series
Cases on Material Adverse Effect (“MAE”) clauses (also known as Material Adverse Change, or MAC, clauses) rarely come before the English courts, so there are limited English authorities on their construction. The High Court...more
As we begin 2025 and set our goals for the new year (realistic or unrealistic), we outline some of the significant English court rulings from 2024 and the key lessons they offer for the year ahead. In 2024, the courts...more
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
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
A Delaware court found a yoga studio franchisee was entitled to an order requiring the franchisor to buy all of the franchisee’s yoga studios in six states. The court held the franchisor breached its contractual obligation...more
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
On March 1, 2022, the Delaware Court of Chancery delivered a memorandum opinion ordering a yoga franchisor to complete the acquisition of its franchisee’s chain of yoga studios. The case arose out of the parties’ pre-COVID...more
Bardy Diagnostics: Chancery confirms high bar for material adverse effect - The Delaware Court of Chancery was once again required to determine whether a potential buyer should be relieved of its obligation to acquire a...more
In a highly anticipated decision, the Ontario Superior Court of Justice – Commercial List held that Cineworld wrongly terminated its arrangement agreement to acquire Cineplex, which was awarded substantial damages....more
The Delaware Supreme Court opinion in AB Stable VIII LLC v. MAPS Hotels and Resorts One, LLC, et al., No. 71, 2021, (Del. Dec. 8, 2021), considers whether a business’s response to the COVID-19 pandemic violated an “ordinary...more
Bardy Diagnostics, Inc. v. Hill-Rom, Inc. C.A. No. 2021-0175-JRS (Del. Ch. Jul. 9, 2021) - Bardy manufactures a patch that measures heart rate. Its reimbursement rate for the patch had for years been set around $365 per...more
Williams: Court of Chancery Finds Poison Pill Unenforceable - In February, the Delaware Court of Chancery held that a shareholder rights plan (a "poison pill") adopted by The Williams Companies, Inc. at the onset of the...more
Delaware Chancery Court awards specific performance after finding that buyer failed to demonstrate a material adverse effect or ordinary course breach by target and that buyer failed to use reasonable best efforts to obtain...more
Dans sa décision rendue récemment dans l’affaire Fairstone Financial Holdings Inc. v. Duo Bank of Canada (l’« affaire Fairstone »), la Cour supérieure de justice de l’Ontario (rôle commercial) (la « Cour ») s’est penchée sur...more
In its recent decision in Fairstone Financial Holdings Inc. v. Duo Bank of Canada (Fairstone), the Ontario Superior Court of Justice (Commercial List) (Court) addressed the interpretation of material adverse effect (MAE)...more
As COVID-19-related force majeure litigation continues to arise in both common and civil law jurisdictions, we take a first look at the approach to force majeure in civil law jurisdictions as compared to the common law...more
Market Trends: What You Need to Know - Over the past almost 15 years covered by the ABA studies, materiality scrapes have morphed from being a somewhat uncommon provision, seen in about 14% of transactions in 2005, to...more
We highlight the responses companies are taking in light of the current environment and the arguments some buyers are making to terminate transactions. The COVID-19 pandemic has caused a steep decline in US M&A activity in...more
The COVID-19 pandemic and the responses adopted by governments around the world to mitigate its human cost will have a considerable impact on economic activity. We are seeing the forced closures of businesses and restrictions...more
Acquisition agreements customarily address risk associated with significant downward changes to the target’s business prior to closing through a variety of provisions, including through the use of the “material adverse...more
The outbreak of coronavirus (also known as COVID-19) is reportedly impacting global manufacturing, transportation and cross-border supply chains underpinning many aspects of international trade and commerce. Some companies...more
A year after Akorn v. Fresenius (Akorn case), the first Delaware case holding that a party was entitled to terminate a merger agreement based on a material adverse effect (MAE), the Delaware Court of Chancery, in Channel...more
On December 18, 2019, Chancellor Andre G. Bouchard of the Delaware Court of Chancery ruled that defendant Boston Scientific Corporation was not entitled to terminate its merger agreement with plaintiff Channel Medsystems,...more
On December 18, 2019, the Delaware Court of Chancery issued a 119-page post-trial memorandum opinion 1) rejecting a buyer's argument that the target company had breached representations and warranties in the parties' merger...more
In the first case following Akorn v. Fresenius to rule on a party’s entitlement to terminate a merger agreement on the basis of a material adverse effect (MAE), the Delaware Court of Chancery ordered Boston Scientific...more