If you’ve followed my blogs on TheCorporateCounsel.net, you know that I never pass on a chance to blog about situations involving even the most tangential link between celebrities and corporate law issues. That’s why I was delighted to discover that this recent Cooley retrospective on investor activism in 2025 had a big section on the rise of “celebtivists.”
Cooley highlighted JANA Partners’ highly publicized decision to team up with Travis Kelce in a campaign targeting Six Flags. This excerpt points out that JANA’s work with Taylor Swift’s betrothed is hardly the only example of celebrities getting involved in promoting or defending against activist campaigns:
Notably, Six Flags was not the first time that JANA locked arms with a celebrity. JANA previously worked with CC Sabathia and Dwyane Wade at Freshpet. Starboard Value has also teamed up with a celebrity – Shaquille O’Neil – in connection with an investment in Papa John’s.
As a matter of strategy, partnering with a “celebtivist” is attractive. Leveraging high-profile relationships can draw significant attention to campaigns, functioning to increase external pressure on issuers and drive retail shareholder interest. How activists will continue to bring public-facing personas into the fold remains to be seen, but companies should think creatively about rolling out the red carpet for Hollywood when appropriate.
In fact, celebrities have defended companies facing activism. When Dan Loeb’s Third Point targeted Sony, George Clooney publicly criticized Loeb’s attempt to influence the entertainment giant. George Lucas took a similar stance defending Disney in the face of its proxy fight with Trian. Lucas, the largest individual investor, voiced support for both Disney CEO Bob Iger and Disney’s board. Other influential personalities and celebrities – including the family of Walt Disney, Laurene Powell Jobs, Jamie Dimon, actor Josh Gad, and former CEO of Disney, Michael Eisner – also publicly supported Disney’s leadership.
Needless to say, I love this development and hope “celebtivism” continues to surge. I’m getting a little long in tooth, but if events permit me to turn this blog into the M&A law version of TMZ before I pass the torch, I’ll retire a happy man.
SRS Acquiom recently published its 2026 M&A Working Capital Purchase Price Adjustment Study. The study analyzes more than 1,570 private-target acquisitions with an aggregate deal value of approximately $385 billion that closed from 2020 through Q3 of 2025 and that had a finalized purchase price adjustment. Here are some of the highlights:
– 92% of all deals during the survey period had purchase price adjustment provisions
– 57% deals had an initial buyer-favorable PPA claim, while the buyer proposed a seller-favorable adjustment in 34% of deals
– 22% of adjustment claims with initial buyer-favorable adjustments were disputed, compared to only 6% of initial seller-favorable adjustments
– 51% of final adjustments were in the buyer’s favor, compared to 38% in the seller’s favor
– The average buyer-favorable final adjustments soaked up 77% of the PPA escrow, while the median buyer-favorable adjustment grabbed 38% of the escrow.
– Buyer-favorable final adjustment represented 0.76% of the transaction value and 0.27% of the median transaction value of the deals completed during the survey period. Seller-favorable adjustments represented 0.68% of the average transaction value and 0.17% of the median transaction value.
The study also addresses drafting considerations relating to various PPA provisions, including contractual deadlines, information rights, dispute resolution, and accounting methodology.
With Bloomberg’s Matt Levine covering failed M&A and the misappropriation of trade secrets not once, but twice, recently, this topic shot to the top of my list for blogs this week. Luckily, speakers on the “Surveying the M&A Landscape” panel at Northwestern Pritzker School of Law Securities Regulation Institute shared some thoughts, and it’s on the agenda for tomorrow’s ABA M&A Jurisprudence Subcommittee meeting. The risk is this:
– From a seller’s perspective, that the buyer misappropriates trade secrets and terminates negotiations
– From a buyer’s perspective, defending claims after failed M&A because a seller has a motive and potential grounds for trade secret misappropriation allegations
The risk is not hypothetical either. As Money Stuff explains:
Phillips 66 Co. was accused of doing something like this to Propel Fuels Inc. in 2024, Novo Nordisk A/S was accused of doing something like this to Metsera Inc. in 2025, and just this month Post Road Group was accused of doing something like this to Planet Networks Inc.
The jury reached a $604.9 million verdict for the plaintiff, representing Phillips 66’s unjust enrichment. The jury also found, by clear and convincing evidence, that Phillips’ actions were willful and malicious. The jury’s finding triggered further proceedings concerning whether the court should impose exemplary damages and, if so, how much those damages ought to be.
The court determined that the punitive damages waiver in the NDA was unenforceable and awarded damages of three times the potential purchase price, including the earnout. If that sounds especially punitive, compare that to the statutory cap plaintiffs sought of 2x the jury award, which was $1.2 billion. While the court found that the defendant’s misconduct was “reprehensible” and “duplicitous,” it also cited the defendant’s failure to follow some practices that other buyers acting in good faith might also not adopt.
So, what’s a (concerned) seller and buyer (operating in good faith) to do to prevent misappropriation of trade secrets or trade secret litigation? At SRI, Wachtell’s David Katz and Milbank’s Iliana Ongun shared these tips for sellers:
– In the NDA stage, make sure seller’s commercial teams are considering what information they’re sharing with the buyer and what information they’ll regret having shared if the deal doesn’t go through.
– Stage due diligence until you narrow the funnel of buyers and be careful how you share commercially sensitive information. Consider requiring a “clean team.”
– If the buyer decides not to proceed, consider whether they’re obligated to tell the seller that they’re no longer interested.
This Cooley alert is focused on buyers (especially in the medical device industry) and shares these recommendations, saying a failure to follow these can “haunt a company in future litigation.”
– Create buffers between engineering decision-makers and third-party confidential information – employ a “clean team” for technical due diligences.
– Establish clear protocols regarding identification of materials considered trade secret by third parties.
– Isolate third-party confidential materials, and prevent any internal dissemination thereof.
As I shared shortly after the decision, the Delaware Supreme Court recently affirmed in part and reversed in part the Chancery Court’s decision in Fortis Advisors v. Johnson & Johnson. In addition to sharing some thoughts about the Court’s decision regarding J&J’s successful implied covenant arguments, this Fried Frank alert also shares some tips for drafting earnouts — particularly for life sciences M&A.
When drafting a regulatory approval provision, consideration should be given to the possibility (even if remote) that the regulator might eliminate, replace or modify the specified regulatory approval. In J&J/Auris, the Supreme Court emphasized that the parties “anchored their milestones to a specific regulatory category and nothing more”—and that drafting choice “foreclose[d] any claim that the contract is silent about what form of FDA clearance would suffice.” The Supreme Court observed that Auris and J&J “neither defined the milestones by reference to ‘regulatory approval by 510(k) or any successor or alternative pathway (emphasis added)’ nor provided that the earnouts would adjust if the FDA closed the 510(k) route or extended its review.”
The Supreme Court’s decision also highlights certain drafting considerations with respect to (i) efforts obligations and (ii) anti-reliance provisions. With respect to efforts obligations, where the parties set a standard for the required efforts (such as, in this case, “commercially reasonable efforts comparable to J&J’s other priority medical products”), and they also preserve some discretion for the obligated party (in this case, a list of ten factors that J&J could “take into account” when determining what efforts to take), the drafting should be clear as to whether the discretionary factors are subject to, or instead independent of, the specified efforts standard. With respect to anti-reliance provisions, where the agreement includes an earnout, the buyer should consider seeking an express disclaimer from the seller as to its non-reliance on the buyer’s extra-contractual statements relating to the likelihood of achievement of all or any part of the earnout.
‘To state a claim for aiding and abetting, a plaintiff must allege that a third party knowingly participated in a breach of fiduciary duty.’ [. . .] Knowing participation ‘involves two distinct concepts that are sometimes analyzed separately: knowledge and participation.’
‘Knowledge’ means the alleged aider and abettor has “knowledge that the primary party’s conduct was a breach’ and ‘knowledge ‘that their conduct was legally improper.’ [. . .] ‘Participation’ exists where an aider and abettor substantially assists the fiduciaries in breaching their duties. Substantial assistance involves “overt participation such as active ‘attempts to create or exploit conflicts of interest in the board’ or an overt conspiracy or agreement between the buyer and the board.’ [. . .] [T]he Supreme Court in Mindbody and Columbia Pipeline have settled that a party’s failure to correct an incorrect proxy statement, even in the face of a contractual duty to do so, is not enough for a defendant’s conduct to amount to substantial assistance.
In this case, the plaintiffs claim that financial advisor, Jefferies, aided and abetted breaches of fiduciary duties through its involvement with materially misleading proxy disclosure and board presentations. Jefferies argued that its involvement constituted passive awareness or silent assent, but the court disagreed. Applying the four factors that the Chancery Court articulated in In re Dole Food Co., Inc. Stockholder Litigation and the DE Supreme Court adopted in Mindbody and Columbia Pipeline, Chancellor McCormick denied Jefferies’ motion to dismiss because three of the four Dole factors supported an inference that Jefferies knowingly participated in the breach, noting that Jefferies was the preparer of the allegedly misleading board presentation and stockholder presentation.
According to the Amended Complaint, Jefferies created the allegedly misleading September 2020 and December 2020 presentations. One was presented to the Forum III board (September 2020), the other was disseminated to stockholders (December 2020), and both contained the allegedly misleading representations that the Indiana Plant could produce over 100,000 vehicles per year and employed 400 workers.
The presentations also contained allegedly inflated financial projections. Jefferies did not disclose to the Forum III board that it had learned from its prior work with SF Motors that the Indiana Plant furloughed all but 16 of its workers, could only produce 50,000 to 70,000 vehicles per year, and that the financial projections for the plant were much lower than what would be disclosed in the Proxy Statement. It also failed to include any of that pre-IPO information in the September 2020 presentation, creating a misleadingly optimistic impression of Legacy ELMS when the presentation was disseminated to stockholders. Authoring a materially misleading statement is different than failing to correct someone else’s.
On January 14, the House Financial Services Subcommittee on National Security, Illicit Finance, and International Financial Institutions held a hearing on CFIUS. As detailed in this Debevoise alert, Treasury Assistant Secretary for Investment Security Chris Pilkerton shared his top-five 2026 goals for CFIUS during the hearing. The alert summarizes his testimony as follows:
– Maintaining national security as CFIUS’s core mission. Pilkerton emphasized that CFIUS’s primary objective remains identifying and mitigating national security concerns arising from covered transactions. He described the process as evaluating foreign actor threats and transaction vulnerabilities and identifying appropriate mitigation measures. Central considerations include foreign access to technology and data, proximity to sensitive sites and adversarial state ownership.
– Improving process efficiency. Pilkerton highlighted the Known Investor Program (the “KIP”), which was launched on a pilot basis last year. The KIP seeks to collect detailed information from repeat or trusted investors in advance of transactions. The Department of the Treasury (“Treasury”) intends this program to expedite reviews for lower-risk investors while preserving robust CFIUS reviews. A public request for information is expected soon to inform Treasury’s finalization and formal launch of the KIP.
– Prioritizing non-notified transaction review. Transactions not filed with CFIUS, known as non-notified transactions, continue to be a CFIUS priority for review. Recognizing that post-closing mitigation is often more difficult and disruptive, CFIUS plans to expand outreach and detection efforts to address transactions that close without a CFIUS filing. Although CFIUS filings are voluntary for many transactions, CFIUS plans to continue to address transactions that implicate, but do not comply with, the mandatory filing requirement.
– Expanding expertise in key risk areas. Pilkerton committed to doubling the size of CFIUS’s research team, with a focus on PhD-level experts in emerging technologies, artificial intelligence, semiconductors, biotechnology and sensitive data sectors.
– Continuing international and domestic engagement. Consistent with the Foreign Investment Risk Review Modernization Act of 2018, Treasury will continue to engage with foreign allies and partners on their own investment screening regimes. Pilkerton also stated that he intends to meet with state officials and legislators to increase awareness of CFIUS, its jurisdiction and its processes.
The alert also summarizes the concerns expressed by Subcommittee members, including scrutiny of China-related transactions and farmland and critical infrastructure.
On Friday, Corp Fin released a bunch of updated and new CDIs. Three amended CDIs address when offers and sales of securities may be registered on Form S-4 (or F-4) after “lock-up” agreements or agreements to tender are executed before the filing of a registration statement.
Two revised CDIs reflect a reversal of the Staff’s prior approach to voluntary Notices of Exempt Solicitation filed by soliciting persons who do not beneficially own more than $5 million of the class of subject securities.
A new CDI modernizes the broker search process, providing that the staff will not object if a registrant conducts a “broker search” less than 20 business days before the record date as long as it reasonably believes that proxy materials will be timely disseminated to beneficial owners and otherwise complies with Rule 14a-13.
A new CDI addresses when a registrant is unable to distribute an information statement in compliance with Rule 14c-2(b)’s 20-calendar-day requirement because the written consents were solicited by a dissident security holder without the registrant’s knowledge.
One new CDI addresses the availability of the Rule 14e-5(b)(10) exception for tender offers that qualify for the Tier I cross-border exemptions and one addresses whether Rule 14e-5(b)(12)(i) permits purchases outside a tender offer by the financial advisor’s affiliates on behalf of the offeror with the purpose of facilitating the tender offer.
Finally, Corp Fin Staff released updated Regulation S-K CDI 217.01. The update provides additional clarity on historical compensation information for a spun-off registrant. See my blog on CompensationStandards.com.
I really liked this recent LinkedIn post from Squire Patton Boggs’ Danielle Asaad with tips on how to quickly review a private company merger agreement in an auction process. I think everyone at one point or another has had one of these arrive in their inbox with an exceptionally short fuse for review. Danielle has a PowerPoint that offers some good tips on how to quickly make your way through that document without missing key points. Check it out if you get a chance.
In Mitchell v. Taro Pharmaceuticals, the SDNY dismissed disclosure claims under Section 13(e) of the Exchange Act challenging a going private merger between Taro Pharmaceuticals and its 85% stockholder, Sun Pharmaceutical Industries. This excerpt from a Goodwin newsletter discussing the decision addresses the plaintiffs’ disclosure claims and the Court’s responses to them:
First, the plaintiff claimed the proxy failed to specify whether the financial adviser to Taro’s special committee “recommended” the merger consideration. The court rejected this argument because the proxy explicitly said that the deal price “was determined through negotiations between the Special Committee and Sun” and was not set by the financial adviser. While the plaintiff theorized that the adviser provided a “target” price that the special committee adopted, the court rejected this as speculative and lacking in the factual support required to plead misleading statements under the Private Securities Litigation Reform Act of 1995.
Second, the plaintiff alleged that the proxy statement provided a misleading explanation of the adviser’s financial analyses. The court agreed that, when viewed in isolation, the proxy’s description of one financial analysis could be misleading. But other passages in the proxy provided additional information that corrected any misleading impression. Moreover, as is typical in going-private deals governed by Section 13(e), the proxy attached the financial adviser’s final presentation to the board, which described the adviser’s financial analyses in further detail, as an exhibit. Given all these surrounding disclosures, it was “inconceivable” that any stockholder was misled.
Third, the plaintiff argued that the proxy failed to disclose that, in another pending securities lawsuit, Taro had received a settlement offer of $36 million. This allegedly rendered the proxy misleadingly incomplete because Taro had disclosed a loss contingency amount of $141 million in related antitrust litigation. But as the court observed, the securities litigation was distinct from the antitrust litigation. And the securities class action settlement became public more than a month before the stockholders voted, so stockholders could hardly claim to have been misled about the settlement.
Finally, the plaintiff claimed that the proxy misled investors by disclosing Glass Lewis’ and Institutional Shareholder Services’ recommendations in favor of the merger but not their full reports. The plaintiff relied on SEC rules requiring, in going-private transactions, detailed disclosure concerning reports and opinions that are received from outside advisers. The court reasoned that these rules apply to advisers engaged by the issuer (such as financial advisers) and not independent proxy advisers with no relationship to the company.
Despite the demanding disclosure requirements imposed on going private transactions by Exchange Act Rule 13e-3 thereunder, the SDNY noted that many courts have refused to imply a private right of action under Rule 13e-3, and that the issue remains unsettled. However, the Court also concluded that it did not need to address this issue to resolve the case.
The defendants in Moelis promptly appealed the Chancery Court’s decision to the Delaware Supreme Court, and yesterday, the Court issued its decision dismissing the case. While the Chancery Court’s decision raised several substantive issues about the board’s ability to contractually limit its statutory authority, the Supreme Court resolved the case on procedural grounds.
In light of the legislative changes addressing the substantive issues in the case – which the Court noted in its opinion – that’s probably not surprising. Still, it’s a little disappointing to those of us who were perhaps hoping for some additional insight into the merits of the case. Instead, the introductory paragraph of Justice Traynor’s opinion summarizes what we got:
In the Court of Chancery, a stockholder sought a declaratory judgment that certain provisions of a stockholders agreement were facially invalid and unenforceable because the provisions interfere with the corporate board’s management of the business and affairs of the corporation as required by 8 Del. C. § 141(a). In this opinion, we conclude that (i) to the extent that the challenged provisions are at odds with § 141(a), they are not void, but voidable, and (ii) the plaintiff’s challenge is barred by laches.
The Court’s 43-page opinion addresses the distinction between void and voidable contracts & analyzes the application of the laches doctrine to equitable claims, but it doesn’t do much more than that. So, if you were hoping for some more substantive insights into the issues presented by Moelis, I’m afraid you’re out of luck.
The Delaware Supreme Court focus on procedural issues doesn’t mean that its decision is free from controversy. At least one member of the plaintiffs’ bar has already expressed concern about the potential implications of the Court’s approach to the laches defense in this case.