DealLawyers.com Blog

Here’s an interesting analysis from Bloomberg Law that says despite the handful of high-profile deal termination disputes that we’ve seen since the pandemic upended things, the number of Covid-19-related deal terminations that have ended up in court is actually pretty small. Here’s an excerpt:

A few high-profile mergers—like LVMH‘s pending purchase of Tiffany & Co., and Sycamore Partners’ terminated purchase of Victoria’s Secret from L Brands Inc.—have spawned lawsuits between the parties that have received much attention. But an analysis of Bloomberg Law dockets indicates that only a very small number of M&A deals terminated since March 12, 2020 (the date the World Health Organization declared the pandemic) resulted in lawsuits between the parties.

The same is true for the larger category of currently pending M&A deals larger than $500 million that were announced in the year prior to the pandemic. In fact, upon our review of a total of 255 deals fitting either description, we found only six in which the parties sued each other regarding the transaction in U.S. courts.

Of course, while the parties may not be suing each other, the same can’t necessarily be said for their shareholders. Bloomberg Law found that 26 out of the 255 deals it reviewed have faced or are currently facing shareholder suits premised on securities law violations associated with the transaction.

– John Jenkins