September 25, 2006

Retirees Have Standing to Sue Acquirors in 5th Circuit

A lot of deal lawyers are worried about the recent 5th Circuit case – Halliburton Benefits Committee v. Graves – which allowed retirees to pursue the buyer as a result of a standard employments benefits provision of a merger agreement (even though the agreement had specific “no third party beneficiary” language). We have posted a copy of the opinion in our “M&A Litigation” Portal.

It will be interesting to see if lawyers try to significantly cut back the scope of traditional covenants due to a concern that possibly thousands of employees might now have standing to sue over language interpretations. Thanks to Julie Jones of Ropes & Gray for the heads up and her wisdom!