Following up on last week’s blog regarding the Sallie Mae lawsuit, according to the M&A Law Prof Blog, the parties initially could not agree on a form of waiver – so SLM sent a letter to Vice Chancellor Strine reiterating its request for a trial date and JC Flowers then sent a letter to VC Strine saying that despite the parties inability to agree on a form of waiver, it is unilaterally waiving the restrictive covenants in the merger agreement. Then, there was this second letter. And finally a third letter, accepting the proffered waiver and agreeing to work out a date for trial.

But then yesterday, the M&A Law Prof Blog brought us the latest, which is repeated below:

Remember SLM? It seems so long ago. When we last left the deal (or depending upon your persepctive, litigation), the parties had agreed on a trial which everyone thought would occur in January. Well, not everyone. Today, the Flowers group sent a letter to the Delaware Chancery Court. In it, Flowers et al. state:

“In our conversations with Sallie Mae’s counsel, they have indicated that they would be seeking a trial date commencing in either February or April 2008 (The dates apparently are dictated in part by Mr. Susman’s availability.) We believe that either time frame would impair the Buying Group’s ability to prepare its defense to a $900 million claim. In light of the complexities of this case and the stakes involved, the Buying Group believes that trial should be scheduled for September or October 2008, at the Court’s convenience, less than one year from now.”

A January trial is but a dim memory — we are at February or April now at best. Flowers et al. go on to conclude:

“As the Court recognized at the October 22 scheduling conference, once the Buying Group waived the covenants and other restrictions on Sallie Mae’s conduct, the need for expedition was removed and “we really are in an ordinary kind of situation” We recognize that the Court intends that this matter proceed more promptly than the two years that is typical for non-expedited litigation, but we believe the Buying Group’s proposal is consistent with that guideline. There is no longer any credible claim of irreparable injury to Sallie Mae: this case is simply a dispute about a sum ofmoney – albeit, a very, very large sum of money. The Buying Group has no interest whatsoever in prolonging this litigation. Its only interest is in assuring that it has sufficient time to develop and prepare its defense. We believe that the schedule that we have proposed accomplishes that goal. We look forward to discussing these matters with the Comi in Chambers on November 5.”

The Flowers group is right here. This really is now just an ordinary trial about a relatively large sum of money. I would expect Strine though to split the baby a bit and set a trial somewhere in between the parties selected dates — say a nice July trial in Delaware. We shall learn more on Nov 5. Hopefully, it will be as fun as the last hearing. BTW — for those who are still betting on a deal, it seems so, so far away right now.