About the Course
Introduction
This CLE course will provide practical guidance to M&A counsel for drafting enforceable best efforts and commercially reasonable efforts clauses in M&A agreements, including a discussion of how courts’ interpretations of the provisions have varied from state to state.
Description
Parties to M&A agreements generally negotiate clauses in the deal documents requiring one or both parties to use their “best efforts” to secure stockholder approvals, antitrust and other regulatory approvals, opinion letters, financing and/or third-party consents prior to deal closing. In some states, “reasonable efforts” or “commercially reasonable efforts” provisions are instead used to convey the parties’ expected performance under the contract.
When a deal fails to close and disputes between the buyer and seller arise, interpreting efforts clauses often presents challenges for the parties, M&A counsel and the courts. Because counsel often fail to clearly define the actions that constitute “best efforts,” “commercially reasonable efforts,” or some variation thereof, courts have had a difficult time interpreting efforts clauses. While there is limited court guidance on this issue, a recent Delaware Court of Chancery case, Williams Companies v. Energy Transfer Equity L.P., provides some clarity on how Delaware courts will interpret efforts language.
Listen as our authoritative panel examines how courts have ruled in disputes centered around best efforts, reasonable efforts and commercially reasonable efforts clauses in M&A deal documents. The panel will discuss best practices for drafting clear and predictable efforts provisions that adequately reflect the parties’ expectations.
Presented By
Mr. Mihanovic, head of the Firm’s Bay Area Transactions Group, primarily focuses his practice on corporate finance matters and mergers and acquisitions (M&A). He represents companies in a broad range of industries, with particular emphasis on the technology, life sciences and healthcare sectors. Mr. Mihanovic serves as lead counsel on behalf of issuers and underwriters in public offerings and private placements of equity and debt securities. He handles stock and asset acquisitions, divestitures, mergers, proxy fights and joint ventures and has had primary oversight responsibility for the regional and worldwide acquisition programs of multiple clients. Mr. Mihanovic represents early-stage companies in connection with formation and organizational issues and venture capital and has also represented investors in complex venture capital transactions involving equity and debt. He has substantial experience advising corporate boards of directors and management regarding fiduciary duties, including in connection with potential change in control transactions and consideration of “poison pill” stockholders rights plans, and corporate governance issues. Mr. Mihanovic assists publicly traded companies with their U.S. Securities and Exchange Commission (SEC) filings and other securities compliance matters. He also advises investment banks on securities compliance issues and in acting as a financial adviser and delivering fairness opinions in the context of acquisitions and restructurings.
Mr. Nelson is a highly experienced trial lawyer and litigator, with a focus on complex business and intellectual property litigation. Over the course of almost 30 years, he has served as lead counsel representing clients in a broad range of business disputes. He is a frequent author and speaker on a broad range of topics, including trial techniques, litigation, and financial and accounting issues facing corporate clients.
Mr. Robins practices extensively in the general corporate and corporate governance, M&A, finance, intellectual property (including licensing, compliance and DMCA) and information technology/data security areas. He represents public and private clients of all sizes and in all industries ranging from Fortune 50 multinational firms to substantial private companies to start-ups to individual executives. His work encompasses transactions of all sizes and covers a wide array of transactions including business acquisitions, shareholder buy/sell agreements bank and similar financing, software licenses and computer/telecom hardware procurements, joint ventures, equipment and real estate leases, patent licenses, outsourcing and managed service contracts. He also publishes extensively in a number of legal journals and presents at legal conferences.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Date + Time
- event
Thursday, October 20, 2016
- schedule
1:00 PM E.T.
- Examples of common usage of best efforts, reasonable best efforts and commercially reasonable efforts clauses in M&A agreements
- Case law guidance
- What is required of parties to satisfy “best efforts,” "reasonable best efforts" and "commercially reasonable efforts" in M&A deals?
- How are courts applying the implied covenant of good faith and fair dealing when interpreting efforts provisions?
- Best practices for drafting efforts provisions in M&A agreements
The panel will review these and other key issues:
- How are “best efforts,” “reasonable best efforts” and “commercially reasonable efforts” different?
- What challenges do M&A counsel face surrounding the drafting and enforcement of efforts clauses?
- How can counsel draft efforts provisions in their M&A agreements that clearly reflect the intent of the parties and do not promise too much or too little?
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