Topic: M&A

Delaware Clarifies That Statutory Appraisal Rights Can Be Waived

Controlling stockholders sometimes seek to limit the ability of new investors in their company to ‎interfere with future exit transactions. They may do this by requiring the new investors to agree ‎to vote in favor of a transaction proposed by the controlling stockholder (a “drag-along ‎agreement”) or to expressly waive any appraisal rights because those rights can create uncertainty ‎for an exit transaction.

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SEC Proposes Changes to Disclosures for Acquisitions and Dispositions

On May 3, 2019, the SEC proposed rule amendments to financial information that investors receive regarding the acquisition and disposition of businesses.  The SEC’s rules requiring target company and pro forma financial statements are complex.  Creating the financial statements often results in significant delay and expense in M&A situations.  The SEC’s proposed changes are intended to address these difficulties.

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Which Way Does the MAC Knife Cut

The Delaware courts have long prided themselves on the contractarian character of their approach to interpreting and enforcing agreements.  In the M&A context, this has meant holding parties to the transaction they agreed to do, as reflected in IBP, Inc. v. Tyson Foods, Inc., 789 A.2d 14 (Del. Ch. 2001), and Hexion Specialty Chemicals, Inc. v. Huntsman Corp., 965 A.2d 715 (Del. Ch. 2008).

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