February 1, 2010
Federal Court Rules on Timing of M&A Negotiation Disclosure
Recently, as noted in this Milbank Tweed memo by Robert Reder, a Federal District Court – in Levie v. Sears Roebuck & Co. – offered guidance as to the timing for disclosures in connection with merger or other change in control transactions under the federal securities laws. The principles that the Court relied on in reaching its decision support the view that, as a general matter, disclosures should not be required, even though active negotiations are under way, and the parties are “kicking the tires” of a transaction until definitive documentation is signed and the parties are required to file a Form 8-K.