News & Analysis as of

Merger Agreements Breach of Contract Corporate Sales Transactions

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

Jones Day

COVID-19 and Merger Litigation: Takeaways After Two Years

Jones Day on

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

Stikeman Elliott LLP on

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

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?

Goulston & Storrs PC on

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

Carlton Fields

Damages for Reps and Warranties Breaches

Carlton Fields on

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

Carlton Fields

The Perils of Using Baseball Arbitration to Resolve RWI Policy Disputes

Carlton Fields on

In the world of M&A and private equity deals, buyer-side representation and warranties insurance (RWI) transfers the risk of a seller’s representation to an insurer. To adequately safeguard the insurer, it therefore becomes...more

Carlton Fields

Value Claim: Non-Recurring Impact of Unknown Business or Operational Issue

Carlton Fields on

RWI valuation claims often arise from a breach of financial statement representation and warranties where the buyer asserts that the transaction was over-valued because prior earnings, on which the purchase price was based,...more

Carlton Fields

Breach vs. Loss

Carlton Fields on

Does a seller’s breach of representations and warranties in a merger and acquisition (M&A) transaction automatically entitle the buyer to compensation?...more

Kramer Levin Naftalis & Frankel LLP

Delaware Confirms the High Threshold for Material Adverse Effect Claims and Interprets ‘Commercially Reasonable Efforts’

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

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