Shareholders, Indemnification Clauses

Court Finds Indemnification Provisions in Merger Agreement Binding on Non-Signatories

Stinson - Corporate & Securities Law Blog on 7/26/2021

In Houseman et al v. Sagerman et al the Plaintiffs challenged the enforceability of the indemnification provisions in a merger agreement amongst other things. The Merger Agreement provided for an indemnification escrow....more

Court Of Chancery Explains The Abry Partners Doctrine

Morris James LLP on 5/9/2017

Parties to an acquisition often attempt to set limits on what may be recovered in any post-closing dispute between them. This helps the buyer get a lower price in return for the safety the sellers buy with a price concession....more

Impact of the Cigna Health Decision on the Use of the Merger Structure in Private Acquisitions

Dechert LLP on 6/5/2015

When buying a private company controlled by a private equity sponsor but with a substantial number of other shareholders, a common technique to avoid the need to obtain signatures from all the shareholders to a stock purchase...more

Re-examining the M&A Playbook for Non-consenting Stockholders in Light of Cigna Health

BakerHostetler on 3/4/2015

In a case that is likely to impact M&A structuring for certain transactions, the Delaware Court of Chancery held that (1) stockholder release obligations found only in a letter of transmittal and not in the related merger...more

Delaware Chancery Court Concludes Indemnification and Other Provisions of a Merger Agreement Are Not Enforceable Against...

Foley Hoag LLP on 1/21/2015

In November, the Delaware Court of Chancery issued a decision that raises troubling questions about commonly used techniques in private company acquisitions and that, if not modified on appeal or through legislation, could...more

Private Company M&A: Post-Closing Purchase Price Adjustment Provisions: New Decision Holds Some Common Mechanics Unenforceable

K&L Gates LLP on 1/7/2015

In private company acquisitions, it is common for the buyer to require that a portion of the merger consideration be set aside in escrow as an accessible source of funds to cover the buyer’s post-closing indemnification...more