Mergers & Acquisitions Litigation
- Learn More
Clients with major transactions routinely face shareholder and other litigation seeking to block or enforce a deal. As experienced and business-savvy litigators, we are able to fend off many such cases, often breaking new legal ground in the process.
- Securities Litigation
- Financial Institutions
- Mergers & Acquisitions Litigation
- White Collar & Regulatory Defense
- Mergers & Acquisitions
- Capital Markets
- Susanna M. Buergel
- Jessica S. Carey
- Geoffrey R. Chepiga
- Lewis R. Clayton
- Andrew J. Ehrlich
- Brad S. Karp
- Daniel J. Kramer
- Gregory F. Laufer
- Raphael M. Russo
- Audra J. Soloway
- Daniel S. Sinnreich
- Michael E. Donohue
The explosive growth in Special Purpose Acquisition Companies (SPACs) is starting to generate significant amounts of litigation. In this alert, we survey notable SPAC litigation trends and recommend what SPAC sponsors, directors and officers can do preemptively to minimize litigation exposure.
The Delaware Court of Chancery recently held that a dramatic 50+% reduction in the Medicare reimbursement rate for a target company’s sole product did not constitute a “Material Adverse Effect” (MAE) under the merger agreement. The court held, among other things, that the buyer failed to show that any material adverse effect on the target was “durationally significant” and that such effects did not constitute an MAE as defined in the agreement because of the specifics of the MAE definition.
In this issue of the Paul, Weiss Delaware M&A Quarterly, we discuss several decisions of significance to the M&A practice issued during the second quarter of 2021.
Delaware Court of Chancery Permits Buyer to Terminate Merger Due to Target’s Failure to Operate in the Ordinary Course; But Finds No MAE Due to COVID-19
The court held that COVID-19 did not result in a material adverse effect because pandemics fall within the exception for “natural disasters and calamities.”
Currently, the impacts of the coronavirus (COVID-19) would not likely trigger the typical MAE termination right. However, this may change depending on the outbreak’s duration, disproportionate industry or company impacts and whether MAE provisions become more tailored to address this issue. In ongoing negotiations, careful consideration should be given to crafting MAE provisions in light of the outbreak.
Paul, Weiss won a major trial victory for client Channel Medsystems in the first case since the Delaware Supreme Court’s landmark 2018 decision in Fresenius v. Akorn to evaluate whether a merger party was justified in terminating a merger agreement on Material Adverse Event (MAE) grounds.
Paul, Weiss secured a landmark victory for German healthcare group Fresenius SE & Co. when the Delaware Supreme Court affirmed that Fresenius was justified in canceling its $4.8 billion agreement to acquire Illinois-based Akorn, Inc.
Awards & Recognition
Litigation partners Andrew Gordon and Jaren Janghorbani were named “Litigators of the Week” by The American Lawyer in recognition of their trial victory for Channel Medsystems in a high-stakes merger litigation in Delaware.
Awards & Recognition
Paul, Weiss has been recognized with several awards as part of Benchmark Litigation’s annual United States awards program, with litigation partner Lew Clayton winning individual recognition as “General Commercial Attorney of the Year.”