Merger Agreement Termination based on Plain Contract Language

Posted by Paul J. Shim, David I. Gelfand & Mark E. McDonald, Cleary Gottlieb Steen & Hamilton LLP, on Saturday, April 6, 2019 Editor's Note: Paul J. Shim, David I. Gelfand, and Mark E. McDonald are partners at Cleary Gottlieb Steen & Hamilton LLP. This post is based on their Cleary memorandum and is part of the Delaware law series; links to other posts in the series are available here. Related research from the Program on Corporate Governance includes Allocating Risk Through Contract: Evidence from M&A and Policy Implications (discussed on the Forum here) and M&A Contracts: Purposes, Types, Regulation, and Patterns of Practice, both by John C. Coates, IV. [On March 14, 2019], the Delaware Court of Chancery found that a target company in an agreed merger properly terminated the merger agreement following the passage of the specified “end date” where the buyer failed to exercise its right…

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