News & Analysis as of

Merger Agreements Breach of Contract

Cadwalader, Wickersham & Taft LLP

Delaware Chancery Court Enforces Specific Performance and Forces Merger to Close

A recent decision of the Delaware Court of Chancery reinforces the importance of deal certainty, particularly when it comes to efforts-based covenants in merger agreements. In Desktop Metal Inc. v. Nano Dimension Ltd., the...more

Jenner & Block

The Importance of Drafting Precise Earnout Provisions in M&A Transactions

Jenner & Block on

In spring 2019, Pacira Biosciences, Inc. (Pacira) acquired MyoScience, Inc. (MyoScience). At the time of the merger, MyoScience only had one product, called “iovera,” which is a handheld device used primarily for pain relief....more

Paul Hastings LLP

A Victory for Deal Certainty: Reasonable Best Efforts Covenants Should be Taken Seriously

Paul Hastings LLP on

The recent decision of the Delaware Court of Chancery in Desktop Metal, Inc. v. Nano Dimension Ltd. and Nano USI I, Inc. provides valuable lessons for both sellers and buyers on deal certainty and reasonable best efforts...more

Sheppard Mullin Richter & Hampton LLP

Closing Time: Hell, High Water, and Insights from the Delaware Chancery Court Decision in Desktop Metal v. Nano Dimension

Cross-border M&A deals frequently present unique issues and strategic closing considerations for transaction parties to navigate—including national security approvals. In a recent Delaware Chancery Court decision, these...more

Jones Day

Earnouts in M&A Transactions: Recent Decisions From Delaware

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In 2024, Delaware courts issued multiple instructive decisions on earnout provisions in life sciences M&A transactions. ...more

Mayer Brown

Delaware Law Alert: Chancery Court Clarifies Delaware’s Position on Sandbagging and the Use of a Transaction Multiple to Calculate...

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AT A GLANCE - The Delaware Chancery Court has issued a notable opinion that confirms Delaware’s position as a pro-sandbagging jurisdiction and clarifies when damages may be computed using a transaction multiple. We...more

Mayer Brown

Delaware Law Alert: Efforts Standards in Life-Sciences Earnout Provisions

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In two significant recent opinions, the Delaware Chancery Court ruled against the buyers of life sciences companies, holding that they failed to apply commercially reasonable efforts to achieve earnout milestones. In Fortis...more

Vinson & Elkins LLP

Series of Delaware Court of Chancery Decisions Highlights Importance of Earnout Drafting

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In recent months, the Delaware Court of Chancery has decided four significant cases regarding merger agreement earnout provisions. Most notably, in one of the largest judgments ever awarded by the Court, it found Johnson &...more

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

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