Tag: Judicial
Learning Old Lessons From Recent Life Sciences Earnout Disputes: Above All Else, Words Matter
There’s an old saying – “Sticks and stones may break my bones, but words will never hurt me.” While this mantra may help bruised egos on the playground, it’s of no use in M&A disputes. Three recent Delaware Court of Chancery rulings on earnout disputes demonstrate that the contractual post-closing […]
Delaware Supreme Court applies MFW framework to other conflicted transactions
In In re Match Group, Inc. Derivative Litigation, the Delaware Supreme Court answered some important questions about the standard of review applicable to conflicted transactions under Delaware law. The first question relates to the application of the model used in Kahn v. M & F Worldwide Corp., commonly referred to as the “MFW framework.” In that […]
Data Points from Recent Appraisal Decisions
As concerns over the potential exercise of appraisal rights are increasingly being factored into deal price, data points from recent Delaware appraisal decisions may help inform a party of its appraisal risks and, if an appraisal claim is filed, may also be useful in deciding whether to settle the claim […]
Federal Court Gives Teeth to Operational Efforts Covenant in Sanofi/Genzyme Earn-Out Dispute
We keep a close eye on developing cases regarding earn-outs and contingent payment rights in light of the prevalent use of these arrangements in life sciences deals and their increasing use in non-life sciences deals. On September 8, 2016, a federal court in New York declined to dismiss a claim […]
Court Gives Energy Transfer the Right to Walk Based on its Counsel’s Inability to Deliver the Required Tax Opinion
In a rare decision involving unusual facts, the Delaware Court of Chancery held that a buyer (Energy Transfer Equity, L.P.) had the right to terminate a signed merger agreement with its target (The Williams Companies, Inc.) that Energy Transfer no longer wished to close due to the unexpected decline in […]
Federal Appeals Court Rejects “Disclosure-Only” Settlement
Yesterday, in In re: Walgreen Co., the 7th Circuit Court of Appeals rejected a “disclosure-only settlement” involving Walgreen Co.’s 2014 purchase of Alliance Boots and the combined company’s subsequent reorganization. In a strongly-worded but divided opinion, the Court reversed the district court’s ruling, which approved (albeit reluctantly) the disclosure settlement […]
Dell Decision and Recent Amendments to Delaware’s Appraisal Statute
Section 262 of the DGCL provides a statutory remedy for stockholders who do not vote in favor of certain M&A transactions (generally cash mergers) to petition the corporation to buy their stock at a price equivalent to the “fair value” of the stock, subject to compliance with certain procedures. A […]
CDX Holdings Decision Spotlights the Treatment of Stock Options in a Merger
The treatment of outstanding stock options and other equity compensation awards is often a key element of a sale transaction. Because stock options can represent considerable value, how they are treated can have a significant impact on the company’s management team and employees. For the parties negotiating the transaction, it can […]
DE Court Comments on Block-Holder Rights in OptimisCorp
The Delaware Supreme Court issued an Order this week in OptimisCorp v. Waite that could have implications for VC-backed or other companies with so-called “block-holder” directors – or directors who are appointed by a stockholder with a large block of shares – in the context of corporate turmoil where management, […]
Agreements to Agree can be Broken: Negotiating Letters of Intent
On December 23, 2015, the Delaware Supreme Court held that SIGA Technologies, Inc. cannot avoid paying $113 million in expectation damages (plus interest) to PharmAthene, Inc. for breaching an express agreement to negotiate a strategic license in good faith in accordance with terms set forth in a term sheet. The […]