News & Analysis as of

Merger Agreements Breach of Contract Contract Terms

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

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

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

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

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

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

Gray Reed

Left in the Cold: Terminating Merger Agreement that Eliminates Liability for Post-Termination Claims Means What It Says

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The ruling of the Delaware Court of Chancery in Yatra Online v. Ebix highlights the need for M&A practitioners to exercise care when drafting termination and remedies provisions in merger agreements and other contracts and to...more

Kramer Levin Naftalis & Frankel LLP

Delaware Court of Chancery Holds That ‘Effect of Termination’ Provision Bars Party Who Terminated Merger Agreement From Also...

In its recent decision in Yatra Online, Inc. v. Ebix, Inc., Case No. 2020-0444-JRS, 2021 WL 3855514 (Del. Ch. Aug. 30, 2021) (Slights, V.C.), the Delaware Court of Chancery dismissed plaintiff’s breach of contract and other...more

Stinson - Corporate & Securities Law Blog

Termination of Merger Agreement Prevents Suit for Breach

Yatra Online, Inc., v. Ebix, Inc. concerned an abandoned merger that Plaintiff, Yatra Online Inc. (“Yatra”), asserts was sabotaged post-signing by Defendants, Ebix, Inc. and EbixCash Travels, Inc. after Ebix determined the...more

Morris James LLP

Chancery Orders Specific Performance of Deal, Despite Lack of Debt Financing, Finding that COVID-Related Business Decline Was Not...

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Snow Phipps Grp., LLC v. KCake Acquisition, Inc., 2020-0282-KSJM (Del. Ch. Apr. 30, 2021) - In Snow Phipps, the Court of Chancery refused to allow a private equity buyer with pandemic-related cold feet to back out of its...more

Stinson - Corporate & Securities Law Blog

Buyer Potentially Liable for Earnout Even Though it had Right to Operate Target in its Discretion

In Shareholder Representative Services LLC v Albertsons Companies, Inc., the aggrieved former shareholders of DineInFresh, Inc., d/b/a Plated, sought recovery of earnout consideration from Plated’s acquirer, Defendant,...more

Goulston & Storrs PC

The ‘Materiality Scrape’ Provision What’s Market?

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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

Skadden, Arps, Slate, Meagher & Flom LLP

Anthem/Cigna Litigation Underscores Importance of Antitrust Planning in Transactions

On August 31, 2020, the Delaware Chancery Court issued an opinion in litigation between Anthem and Cigna related to the contract in their terminated merger. In its sprawling 306-page opinion, the court detailed a “corporate...more

BCLP

Coronavirus (COVID-19): Material Adverse Effect and M&A Transactions

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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

Carlton Fields

Damages for Reps and Warranties Breaches

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When one party to an M&A agreement alleges that the other breached its representations and warranties, the damages analysis can be complex, depending on the terms of the agreement. Generally, a claim for indemnification due...more

White & Case LLP

Ahead of the pack: US M&A 2019: Key dealmaking decisions from Delaware and New York

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We focus on two H2 2019 rulings that could affect M&A transactions in the future. Genuine Parts: Acceptance of termination fee does not prevent further remedies - In September 2019, the Delaware Chancery Court refused to...more

Cadwalader, Wickersham & Taft LLP

The Delaware Court of Chancery Enforces Clear and Unambiguous Terms of Merger Agreement in Finding Termination Fee Provision Did...

The Delaware Court of Chancery’s recent decision, Genuine Parts Company v. Essendant Inc., provides a helpful reminder that Delaware courts will enforce the clear and unambiguous terms of a merger agreement, and will consider...more

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