Cadwalader Attorneys reviewed recent judicial and regulatory developments on mergers and acquisitions, intra-corporate disputes and governance regulation.
In a memorandum, Cadwalader attorneys considered several important judicial determinations including a Delaware Court of Chancery decision to uphold the termination of a merger agreement based on a "material adverse effect" and a Delaware Supreme Court decision on best evidence of fair value in appraisal litigation. Further, the attorneys reviewed important decisions on the appropriateness of disclosure-only, non-monetary class action settlements and on other central corporate governance principles.
The attorneys also considered recent regulatory and legislative developments, including the Delaware General Assembly's revisions to provisions of the Delaware General Corporation Law. These provisions impact, among other things, appraisal rights and disclosure requirements for shareholders that dissent from a proposed transaction.
Two recent decisions from the Delaware Court of Chancery reached opposite results in the application of the business judgment rule under the Delaware Supreme Court's holding in Corwin v. KKR Financial Holdings LLC.
In Vintage Rodeo Parent, LLC v. Rent-A-Center, Inc., the Delaware Court of Chancery determined that Rent-A-Center, Inc. properly ended its merger agreement with Vintage Capital Management LLC after Vintage neglected to submit a notice to extend the drop-dead date for its pending $1.37 billion buyout of Rent-A-Center.
The Delaware Court of Chancery determined for the first time that a seller had suffered a "Material Adverse Effect" following the execution of a merger agreement. The determination entitled the buyer to terminate an acquisition transaction.
In a Mergers and Acquisitions Update, Cadwalader attorneys reviewed two recent decisions by the Delaware Court of Chancery that highlight the importance of a company's sales process in shaping the outcome of an appraisal proceeding.
In three recent appraisal decisions, Delaware Courts declined to use the deal price as the best evidence of fair value, instead using discounted cash flow analyses and the unaffected market price to make that determination.
The Delaware Chancery Court decision serves as a powerful reminder of the broad freedom of contract that Delaware law accords entities such as LLCs. The decision offers the promise of great latitude to contracting parties and the threat of serious pitfalls for parties that fail to carefully protect their interests in the agreement.
Cadwalader attorneys reviewed significant corporate governance litigation and regulation developments of 2017.
Cadwalader attorneys describe key takeaways from a recent Delaware Supreme Court decision reversing a Court of Chancery determination on the calculation of fair value in a statutory appraisal proceeding.