News & Analysis as of

Merger Agreements Earn-Outs Mergers

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

Morris James LLP

Chancery Holds That Claim Based on Purposeful Tanking of Merger Agreement Earnout Is Breach of Contract Claim

Morris James LLP on

Shareholder Representative Services LLC v. Albertson’s Companies, C.A. No. 2020-0710-JRS (Del. Ch. June 7, 2021) - Many merger agreements include earnout provisions under which the stockholders in the acquired company are...more

Sheppard Mullin Richter & Hampton LLP

Delaware Court of Chancery Decision Provides Guidance on M&A Earnouts

In Shareholder Representative Services LLC v. Albertsons Companies, Inc., 2021 WL 2311455 (Del. Ch. June 7, 2021), the Delaware Court of Chancery (Slights, V.C.) provided key guidance on mergers and acquisitions (“M&A”)...more

Morris James LLP

Chancery Refuses to Enforce Alleged Contractual Rights Not Obtained at the “Negotiating Table”

Morris James LLP on

Obsidian Fin. Grp., LLC v. Identity Theft Guard Solutions, Inc., C.A. No: 2020-0485-JRS (Del. Ch. Apr. 22, 2021) - Delaware is “more contractarian” than many other jurisdictions. Accordingly, as this case illustrates, a...more

Faegre Drinker Biddle & Reath LLP

Make Sure the Language in Your Earnout Provision Accounts for the Obstacles to Receiving Those Future Payments

In M&A transactions, the buyer and seller often disagree about the value of the business or asset being sold. A popular solution is an earnout clause that entitles either the seller or buyer to future payments from the...more

Jackson Walker

Earnouts in M&A Transactions

Jackson Walker on

An “earnout” is a deal mechanism used in a merger and acquisition transaction (“M&A Transaction”) which structures the terms upon which a buyer agrees to pay additional consideration to the seller after the closing of the M&A...more

Dickinson Wright

M&A Practices in a Post-COVID-19 World

Dickinson Wright on

This is certainly a situation where the (purportedly) ancient curse would seem to apply: May you live in interesting times. Living, however, implies moving forward, and that is what the business world is trying to do. ...more

K&L Gates LLP

Earn-Out Provision Of Merger Agreement Requires Extrinsic Evidence To Aid Interpretation

K&L Gates LLP on

In Western Standard, LLC, v. SourceHOV Holdings, Inc. and Pangea Acquisitions, Inc., C.A. No. 2018-0280-JRS (Del. Ch. July 24, 2019), the Delaware Court of Chancery (the “Court”) refused to the grant SourceHOV Holdings, Inc....more

Morris James LLP

Chancery Denies Motion to Dismiss Claim for Breach of Earn-Out When Unable to “Divine any Meaning” From Provision

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Western Standard, LLC v. SourceHOV Holdings, Inc., C.A. No. 2018-0280-JRS (Del. Ch. July 24, 2019). Defendant Pangea acquired BancTec through a merger agreement that provided for an earn-out to former BancTec stockholders...more

A&O Shearman

Delaware Court Of Chancery Denies Motion To Dismiss Breach Of Contract Claim For Failure To Use "Commercially Reasonable Efforts"...

A&O Shearman on

On December 28, 2018, Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery declined to dismiss a breach of contract claim brought by former stockholders of Ception Therapeutics, Inc. (“Ception”) against...more

Morris James LLP

Court Of Chancery Favors Plain Language In Earn-Out Dispute And Declines To Imply Contractual Terms

Morris James LLP on

Greenstar IH Rep. LLC v. Tutor Perini Corporation, C.A. No. 12885-VCS (Oct. 31, 2017) - With every contract under Delaware law comes the obligation to not act so as to deprive the counter party of the benefit of its...more

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