Last month, former Uber executive Eric Alexander filed a complaint (the “Complaint”) against another former Uber executive, Rachel Whetstone.  The Complaint alleges breach of a mutual non-disparagement clause in Whetstone’s separation agreement with Uber; a clause that Whetstone, during her negotiation with Uber, apparently insisted specifically name Alexander and preclude them from disparaging each other.  In the Complaint, Alexander alleges that he is a third party beneficiary of the contract and can therefore enforce the non-disparagement obligation against Whetstone.

Continue Reading Shut Up! (Someone Is Actually Suing on the Basis of a Non-Disparagement Clause)

Until Vice Chancellor Laster’s decision last week in Akorn Inc. v. Fresenius KABI AG,[1] no Delaware court had released an acquiror from its obligation to close a transaction as a result of the occurrence of a “Material Adverse Effect.”[2]  The cases previously adjudicated in Delaware all had required the acquiror to close, often despite a significant diminishment in target value and, in some, the court criticized the acquiror for seeking to avoid its obligations based on little more than buyer’s remorse.  Against this weight of precedent, the Vice Chancellor found that the grievous decline of generics pharmaceutical company Akorn, Inc. after it agreed to be acquired by Fresenius constituted a MAC.  While Akorn presents a stark set of facts and the Delaware Supreme Court has yet to have the final word in the case,[3] the decision nonetheless provides useful guidance to practitioners in shaping and navigating MAC clauses and related contractual provisions. Continue Reading <i>Akorn v. Fresenius</i>: A MAC in Delaware

Lenders’ freedom to transfer their participations in large leveraged loans has been gradually eroded by developments introduced through the last few credit cycles.

This market wrap covers the development of the transferability clause from the early 2000s through to post-crisis developments.

If you have any questions concerning this memorandum, please feel free to contact the authors or your regular contacts at the firm.

For the past several years Cleary Gottlieb has published legal and practical information regarding German public M&A transactions.  For the new edition of the compilation Public Bids and Squeeze-Outs in Germany, a Statistical Survey (2002 – 2016), we have collected and analyzed information related to public bids and squeeze-outs in Germany from January 2002 through December 2016. Continue Reading Public Bids and Squeeze-Outs in Germany, a Statistical Survey (2002-2016)

U.S. and European companies continue to receive bids to sell themselves and their significant assets to companies based in the People’s Republic of China.  Evaluation of these proposals requires due diligence of the acquiror’s ownership structure, assets, cash position, and financing sources.  Moreover, even if this due diligence exercise gives rise to satisfactory results, the continued unpredictability of the PRC government (including its recently enhanced foreign exchange control measures), coupled with the ties of some of these buyers and financing sources to governmental entities in the PRC, as well as the challenges that a non-PRC counterparty faces when seeking to enforce contractual obligations and non-PRC judgments in PRC courts, merit the implementation of an array of innovative provisions in M&A Agreements to protect the seller/target.  Several months ago, we reviewed these provisions in a popular post.  This new post updates that earlier post to reflect recent regulatory developments and the evolution of market practice. Continue Reading An Updated Look at How M&A Agreements Handle the Risks and Challenges of PRC Acquirors

In a recent decision, the Supreme Court eliminated laches as a defense in patent litigation; as a result, defendants are more vulnerable to unexpected claims of patent infringement.[1]  Given this new layer of risk, it is even more important to conduct thorough and nuanced patent infringement diligence on an M&A target, and parties to M&A transactions should take this increased exposure to liability into account when negotiating the relevant representations and warranties and indemnities. Continue Reading No Laches, More Problems: Elimination of Laches in Patent Infringement Suits Increases M&A Risks

The Delaware Supreme Court has affirmed the Delaware Court of Chancery’s ruling that Energy Transfer Equity L.P. (“ETE”) did not breach its agreement to merge with The Williams Companies, Inc. when ETE terminated the agreement on the grounds that its counsel was unwilling to deliver a tax opinion that was a condition to closing.

While the court’s decision has been eagerly anticipated, the larger impact of the ETE/Williams matter occurred back in May 2016 when the dispute became public: the dispute highlighted that tax-opinion closing conditions which are intended to protect the parties against tax risks could instead add to deal risks.

This alert memorandum briefly describes the facts in the case and the court’s decision, and then turns to a survey of what deal counterparties have been doing differently to mitigate “ETE/Williams risk”.  We end with a menu of features deal counterparties should consider using in future deals.  These features include:

—  No tax opinion required
—  Tax opinions prepared before signing
—  Closing condition limited to change in tax law
—  Obligation to accept opinion from other party’s counsel or an alternate counsel
—  Obligation to restructure if necessary to obtain tax opinion
—  Termination fee for termination because of inability to obtain opinion

Please click here to read the full alert memorandum.

Appraisal rights in public M&A transactions have recently garnered greater attention, particularly in Delaware.  As a result, more attention is being paid to the possible inclusion of a closing condition protecting the acquiror against excessive use of appraisal rights, and this should lead to careful attention being paid to the negotiation and drafting of any such conditions and related provisions.  Discussed below are some of the reasons for this greater attention, and suggestions regarding negotiating and drafting such provisions. Continue Reading Negotiating Appraisal Conditions in Public M&A Transactions

Part 2:  Risks Associated with Transfers of Personal Data and Post-Closing Integration

One aspect of mergers and acquisitions that is receiving growing attention is the relevance of privacy issues[1] under U.S. and European Union (“EU”) laws as well as the laws of a growing number of other jurisdictions.[2]  This two-part blog post discusses the principal M&A-related privacy risks and highlights certain “traps” that are often overlooked.  In Part 1, we discussed risks associated with a target’s pre-closing privacy-related liabilities and considered ways to mitigate these risks through adequate diligence and privacy-related representations in M&A agreements.  In this Part 2, we discuss the risks associated with transferring or disclosing personally-identifiable information (“personal data”) of an M&A target (or a seller) to a purchaser (or prospective purchaser) and those associated with the purchaser’s post-acquisition use of such personal data.

Continue Reading Privacy in M&A Transactions: Navigating the Traps, Part 2

Part 1: Risks Associated with the Target’s Pre-Closing Privacy-Related Liabilities

One aspect of mergers and acquisitions that is receiving growing attention is the relevance of privacy issues[1] under U.S. and European Union (“EU”) laws as well as the laws of a growing number of other jurisdictions.[2]  This two-part blog post discusses the principal M&A-related privacy risks and highlights certain “traps” that are often overlooked.  In this Part 1 of the post, we discuss risks associated with a target’s pre-closing privacy-related liabilities and consider ways to mitigate these risks through adequate diligence and representations in M&A agreements.  In Part 2, we will discuss the risks associated with transferring or disclosing personally-identifiable information (“personal data”) of an M&A target (or a seller) to a purchaser (or prospective purchaser) and those associated with the purchaser’s post-acquisition use of such personal data.

Continue Reading Privacy in M&A Transactions: Navigating the Traps