News & Analysis as of

Merger Agreements Material Adverse Effects

Goulston & Storrs PC

What's Market: The Materiality Scrape

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Over the past 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 something near-ubiquitous in M&A purchase...more

Skadden, Arps, Slate, Meagher & Flom LLP

M&A in the AI Era: Key Deal Terms To Watch

The accelerated development of artificial intelligence (AI) has shown the transformative potential of the technology across industries, making it an integral part of strategic planning for market participants, from technology...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

Kramer Levin Naftalis & Frankel LLP

Once More Unto the (Material) Breach: Twitter Sues Elon Musk to Enforce Agreement

On July 12, 2022, Twitter, Inc. sued Elon Musk and certain of his special purpose entity affiliates in the Delaware Court of Chancery, seeking specific performance to force Mr. Musk to close on his agreement to purchase...more

Hogan Lovells

Q1 2022 Quarterly Corporate / M&A decisions updates

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Below is our Corporate / M&A decisions update covering decisions in the first quarter of 2022. This update is designed to highlight selected important M&A, corporate, and commercial court decisions on a quarterly basis....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

Morgan Lewis

Global Healthcare Transactions Series: Impact of COVID-19 on Healthcare Mergers and Acquisitions in UAE

Morgan Lewis on

The COVID-19 pandemic created many uncertainties and challenges for investors and operators alike across the Middle East, including in the United Arab Emirates, which is often considered a regional healthcare and business...more

Akin Gump Strauss Hauer & Feld LLP

Recent M&A Developments: What Can Boards of Directors Expect in 2022?

Editor’s Note: Akin Gump is pleased to publish the first in a series of blog posts covering significant issues U.S. boards of directors may expect to face in 2022. In addition to ongoing pressures on the part of boards of...more

Hogan Lovells

AB Stable v. MAPS Hotels: Pandemic changes to hotel operations breach ordinary course covenant - Quarterly Corporate / M&A...

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In AB Stable VIII LLC v. MAPS Hotels and Resorts One LLC, et al., No. 71, 2021 (Del. Dec. 8, 2021), the Delaware Supreme Court, sitting en banc, affirmed a Court of Chancery judgment finding that a hotel owner violated its...more

Pullman & Comley, LLC

10 M&A Trends Gleaned from the 2020 – 2021 ABA Deal Points Study

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The American Bar Association (ABA) 2020 – 2021 Private Target Mergers & Acquisitions Deal Points Study[1] analyzed publicly available acquisition agreements for 123 transactions executed and/or completed in 2020 and the first...more

Akin Gump Strauss Hauer & Feld LLP

Delaware Supreme Court Rules on Impact of Seller’s Actions in Response to COVID-19 in M&A Transaction

Key Points - On December 7, 2021, the Delaware Supreme Court unanimously upheld the Court of Chancery’s decision in AB Stable VIII LLC v. MAPS Hotels and Resorts One LLC, finding that certain actions taken by the Seller...more

Morris James LLP

Chancery Finds Change in Product’s Medicare Reimbursement Rate Was Not A Material Adverse Effect Excusing Buyer From Closing

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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

Goodwin

Acquirer Beware: “Material Adverse Effects” in Merger Contracts and How Shifting Reimbursement Rates Impact the Healthcare Sector

Goodwin on

On July 9, 2021, the Delaware Court of Chancery (Slights, V.C.) issued an opinion in Bardy Diagnostics, Inc. v. Hill-Rom, Inc., No. 2021-0175-JRS, concluding that the requirements of a “material adverse effect” (“MAE”) clause...more

Kramer Levin Naftalis & Frankel LLP

Sustained or Transitory? Delaware Court of Chancery Finds No MAE Absent Proof of Durationally Significant Effect on Business

Prior to the Delaware Court of Chancery’s opinion in Akorn, Inc. v. Fresenius Kabi AG, C.A. No. 2018-0300-JTL, 2018 WL 4719347 (Del. Ch. Oct. 1, 2018), aff’d 198 A.3d 724 (Del. 2018), no Delaware court had found the existence...more

White & Case LLP

Reverse break-up fees emerge in response to deal terminations

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Even as economies pick up, dealmakers have maintained focus on managing the risk of broken deals - Lockdowns in 2020 brought a large uptick in terminated deals—and although broken deal rates have slowed, there has been a...more

Faegre Drinker Biddle & Reath LLP

How Has COVID-19 Impacted M&A Agreements?

The global outbreak of COVID-19 hit the United States in March 2020. Over a year later, it has irrevocably altered the way that M&A parties negotiate and structure agreements for the purchase and sale of private companies. ...more

Gray Reed

First Delaware COVID-19 M&A Decision

Gray Reed on

In AB Stable VIII LLC v. Maps Hotel and Resorts One LLC et al., the Delaware Court of Chancery has published its first ruling regarding whether or not the effects of the COVID-19 pandemic constitute a material adverse effect...more

Hogan Lovells

Quarterly Corporate / M&A Decisions Update: Q4 2020

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Below is our Quarterly Corporate / M&A Decisions Update for decisions in Q4 2020. This update is designed to highlight selected important M&A, corporate, and commercial court decisions on a quarterly basis. Brief summaries of...more

Skadden, Arps, Slate, Meagher & Flom LLP

Developments in Delaware Corporation Law

The Delaware Court of Chancery’s docket exploded with expedited “broken” deal litigation in 2020, driven by the impact of COVID-19. Beyond pandemic-related merger litigation, stockholder plaintiffs remained focused on claims...more

Akin Gump Strauss Hauer & Feld LLP

Delaware Court of Chancery Issues Precedential Decision Addressing the Impact of COVID-19 on M&A Transaction, Finding Violation of...

In AB Stable VIII LLC v. Maps Hotels and Resorts One LLC, the Delaware Court of Chancery issued a precedential decision addressing whether a buyer could walk away from an M&A transaction because the target company’s responses...more

Dechert LLP

Delaware Court of Chancery Issues Major Decision on COVID-Related Issues in M&A Deals, Allows Buyer to Terminate Agreement for...

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In a late night, 242-page decision, the Delaware Court of Chancery ruled that the buyer in a purchase and sale agreement was relieved of its obligation to close and could terminate the agreement as a result of the changes...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

Goodwin

English Court Rules On COVID-19 Material Adverse Effect In M&A Transaction

Goodwin on

On 12 October 2020, the Commercial Court handed down judgment in the first case in which the English courts have had to consider whether COVID-19 resulted in a material adverse effect (“MAE”) (Travelport Ltd & Ors v WEX Inc...more

Morris James LLP

Chancery Certifies Interlocutory Appeal for Determination of Impact of Remote Proceedings on a Party’s Due Process Rights

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Forescout Tech., Inc. v. Ferrari Grp. Holdings, L.P., C.A. No. 2020-0385-SG (Del. Ch. July 14, 2020) - In the midst of this global pandemic, the Court of Chancery certified an interlocutory appeal to the Delaware Supreme...more

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