December 10, 2018

That’s a Wrap – It’s a MAC: Delaware High Court Rejects Akorn’s Appeal

On Friday, the Delaware Supreme Court issued an order affirming the Chancery Court’s milestone decision in Akorn v. Fresenius, which was the first Delaware decision to hold that deterioration in a seller’s business resulted in a material adverse change entitling a buyer to terminate its merger agreement.

The Supreme Court’s 3-page order – which came only 2 days after oral argument – is as laconic as the Chancery’s 246-page opinion is loquacious.  The Court upheld the Chancery Court’s conclusion that Akorn had suffered a MAE under the Merger Agreement that excused any obligation on Fresenius’s part to close, and that Akorn’s breach of its regulatory reps & warranties gave rise to an MAE termination right.

Copies of the briefs and a video of the oral argument in the case are available on the Delaware Supreme Court’s website. We’re posting memos in our “MAC Clauses” Practice Area.

John Jenkins