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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Commercial Law

Date & Time
  • event Date

    Wednesday, May 15, 2024

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00
CLE
ALL

This CLE webinar will provide guidance for negotiating and enforcing remedies when a deal fails to close due to a breach by either party with a focus on specific performance, limitations on recovering monetary damages, and reverse breakup fee provisions. The panel will provide considerations for buyers and sellers, tips for negotiating and structuring these remedy provisions in M&A agreements, and strategies for navigating the contractual interplay between specific performance, monetary damage claims, and reverse breakup fees.

Faculty

James Jian Hu
Partner
Cleary Gottlieb Steen & Hamilton LLP

Mr. Hu’s practice focuses on public and private merger and acquisition transactions. He regularly advises investors, boards of directors, senior executives, and founders on strategic, legal, and business matters in all types of M&A transactions, including leveraged buyouts, public company mergers, corporate carve-outs, minority investments, and distressed situations. Mr. Hu advises on transactions across the industry spectrum, with substantial experience in the technology, life science and health care, and consumer space. He is an adjunct professor at Cornell Law School and Cornell Tech.

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Steven M. Haas
Partner, Co-Head Mergers and Acquisitions Team
Hunton Andrews Kurth LLP

Mr. Haas regularly counsels publicly traded corporations, privately-held businesses and boards of directors on corporate governance issues, including shareholder meeting disputes, internal investigations and fiduciary duty litigation. He authored chapters on stockholder rights and director duties in the treatise Corporate Governance: Law and Practice and is a speaker on corporate governance and M&A issues.

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Description

Parties to M&A transactions should plan for the risk that their counterparty may refuse to close the deal even if the closing conditions are all satisfied. Fortunately, for a party confronting this scenario, courts have been receptive to demands that the party refusing to close should be forced to perform its obligations, respecting the parties’ intent in the M&A agreement that the specific performance remedy should be granted.

However, the specific performance remedy is not always granted. For example, in a recent Delaware decision (26 Capital Acquisition Corp. v. Tiger Resort Asia Ltd.), the court declined to grant specific performance to a buyer seeking to force a non-U.S. target to perform certain obligations. The panel will discuss how the Delaware courts view the specific performance remedy and drafting tips to increase the chance that the specific performance remedy will be granted.

An alternative remedy to specific performance is monetary damages. A recent Delaware decision (Crispo v. Musk) raised serious questions about a target's right to recover monetary damages reflecting the lost premium that its stockholders would have received if the buyer had closed the transaction. The panel will review this decision, its implications, and the proposed Delaware General Corporation Law amendment in response to this court decision.

Finally, the panel will review the structure and latest trend on the reverse termination fee, which is usually framed as liquidated damages payable by a buyer to a seller or target company in specified circumstances when a deal does not close.

Listen as our authoritative panel discusses the legal issues surrounding specific performance, reverse breakup fees and monetary damages, the seminal cases in this area, and practical considerations for deal lawyers when drafting these remedy provisions in M&A agreements.

Outline

  1. Overview of specific performance and reverse breakup fee terms
  2. Seminal Delaware Court of Chancery decisions construing specific performance and reverse breakup fee terms
  3. Pathway to enforcement of specific performance terms
    1. Relief available to buyers
    2. Relief available to sellers
  4. Irreparable harm--no adequate remedy at law
  5. Availability of expedited review in Delaware vs. other courts
  6. Reverse breakup fees
    1. Conditional specific performance and reverse breakup fees
    2. Reverse breakup fee remedies
  7. Practical considerations and key takeaways

Benefits

The panel will address these and other key issues:

  • What are common specific performance and reverse breakup fee terms?
  • What is the interplay between specific performance, monetary damages and reverse breakup fee terms and what are some key drafting strategies and considerations?
  • When is specific performance available to a party to an M&A agreement?
  • Is Delaware always the preferred jurisdiction and venue for M&A disputes?