Tag: Judicial
M&A Releases and Post-Closing Indemnity Obligations in Private Company Merger Agreements
In Cigna Health & Life Insurance Company v. Audax Health Solutions, Inc. (Del. Ch. November 26, 2014), the Delaware Court of Chancery invalidated two buyer-imposed requirements that are frequently found in private company mergers, specifically the conditioning of payment of merger consideration on a release and certain aspects of post-closing […]
Can we Talk? New York Court Broadens Common-Interest Privilege for Pre-Closing Communications
Aware that parties to an acquisition need to share legal advice in connection with pre-closing activities, a New York appellate court permits the common-interest privilege to protect pre-closing communication, even without pending or anticipated litigation.
Is My Non-Binding Letter of Intent Actually Binding?
The Delaware Supreme Court rules that an integration clause in an acquisition agreement does not transform non-binding earnout provisions in a letter of intent into binding obligations under the definitive agreement.
A Reminder on Adequate Process
The Delaware Chancery Court analyzes a dilutive recapitalization transaction under the entire fairness standard of review and finds flawed process, despite a fair price in the deal.
Exploring the Scope of Recovery for Fraud Claims in Private Company Transactions
Court reviews detailed allegations and potential scope of recovery for fraud alleged against pre-closing officers, directors and, notably, innocent selling stockholders in a private company acquisition.
SEC Issues Guidance on Proxy Voting and Proxy Advisory Firms – Will this Change Proxy Voting Behavior or the Role of Proxy Advisers?
The Securities and Exchange Commission (SEC) recently issued regulatory guidance (see related Q&A) regarding proxy voting responsibilities, including the role of proxy advisory firms and use of advisory firm advice. Implicit in the staff’s guidance is the expectation that firms and advisers incorporate updates to their voting policies and processes […]
Understanding Attorney-Client Privilege in Internal Business Investigations
In a recent DC Circuit case, In re: Kellogg Brown & Root, Inc., No. 14-5055 (June 27, 2014), the DC Court of Appeals clarified the scope of the attorney-client privilege in the context of a business’s internal investigation and described four aspects of an internal investigation that may vary while […]
Amendment to Delaware Statute of Limitations Rules – Drafting Tips
A recent amendment to Delaware law clarifies certain statute of limitations rules, providing parties with increased flexibility to control survival periods for acquisition agreement indemnity provisions and related breach-of-contract claims. The amendment to the Delaware General Corporation Law (the “DGCL”) is described below, along with drafting tips for successfully incorporating […]
“Good Faith” Covenants for Earnouts
The Delaware Chancery Court recently reviewed the application of the implied covenant of good faith and fair dealing in connection with “earnout” provisions in an acquisition agreement. In American Capital Acquisition Partners, LLC v. LPL Holdings, Inc., the court allowed a claim for a breach of the implied covenant to […]
Activists and the Poison Pill
In re Third Point LLC v. Ruprecht, et al. (Del. Ch. May 2, 2014). In the much anticipated review of Sotheby’s two-tiered stockholder rights plan adopted in response to Third Point’s activist campaign and proxy contest, the Delaware Court of Chancery held that the Sotheby’s board did not breach its […]