February 12, 2008
The “Forthright Negotiator Principle”
From Kevin Miller of Alston & Bird: For those unfamiliar with the “Forthright Negotiator Principle” referred to in the URI decision, I came across the following in re-reading the In re: IBP, Inc. Shareholders Litigation decision:
“The record therefore reveals that Tyson’s negotiators knew that Hagen believe that Schedule 5.11 covered the DFG items discussed at the December 29 call. Reasonable and forthright negotiators for Tyson would – and I find did – understand Hagen as expressing her view that the Schedule ensured that Tyson was accepting the fully disclosed risk that IBP would recognize additional charges because lf the accounting improprieties at DFG and that such additional charges would not give Tyson a right to walk away. [citation to Restatement (Second) of Contracts Section 201(2)] to the extent that Tyson negotiators had a question whether Hagen’s carve-out was intended to permit IBP to recognize these additional charges resulting from past accounting practices by way of a restatement of the Warranted Financials, they should have spoken up. The current, hairsplitting interpretation that Tyson advances was never voiced to Hagen at the time, and I don not think that the Tyson negotiators embraced that interpretation at the time.” (emphasis added)
The ‘Former’ SEC Staff Speaks
We have posted the transcript from our recent webcast: “The ‘Former’ SEC Staff Speaks.”