DealLawyers.com Blog

This Arnold & Porter memo suggests that the potential consequences of the US election, together with the fallout from the Brexit vote & political turbulence in Europe, may result in increased uncertainty in deal markets. Since that’s the case, it may be time to take a hard look at deal termination triggers – including MAC clauses. While acknowledging that a Delaware court has never found that a MAC clause was triggered, the memo reviews the case law and contends that parties claiming that a MAC has occurred have some arrows in their quiver:

But if nothing else, recent political events at home and abroad may perhaps remind us never to say never—the fact that there has never been a successful MAE claim does not mean that there never will be one, and a careful reading of IBP, Cooper, and Osram may provide M&A lawyers with useful arguments in uncertain times.

Just how impregnable a wall the Delaware judiciary has created when it comes to MAC clauses may soon be put to the test – with Abbott Laboratories filing a lawsuit in Chancery Court last month seeking to terminate its deal with Alere on the basis of a MAC, and Verizon saber-rattling with Yahoo!  over potential MAC issues.

– John Jenkins