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A recent Delaware Chancery Court decision acts as another reminder of the risks to deal consummation posed by serious conflicts of interest of management and financial advisers. The decision also provides useful lessons for boards of directors dealing with conflicts of interest.
A recent decision of Chancellor Strine of the Delaware Court of Chancery reveals the importance of starting with a good form of an M&A non-disclosure agreement in an important transaction, and not just marking up the last deal's non-disclosure agreement. These agreements should be reviewed with an eye to the parties' overall goals – not just getting a few quick changes in from the last deal.
Delaware Chancellor Leo Strine recently enjoined an attempted hostile takeover due to a breach of two confidentiality agreements. This decision provides one of the most detailed analyses of confidentiality agreement provisions in recent memory (or perhaps ever), and has the effect of implying a standstill provision into a confidentiality agreement where no overt standstill had been negotiated between the parties.
Let the buyer beware – and carry a big seal!
A recent Delaware case regarding the interplay between contractual provisions and the statutory limitations period highlights the importance of the choice of governing law and attention to technical detail within a jurisdiction. The general statute of limitations for claims based on contract, including breach of contract, is three years in Delaware and six years in New York.
According to the Federal Aviation Administration, the commercial air carrier industry will grow by a remarkable 3.7% over the next five years. With a relatively broad range of available assets, certain tax benefits and other favourable characteristics, the aircraft finance market provides numerous advantages for private equity funds seeking new investment vehicles.
The recent case of In re Southern Peru Copper Shareholder Derivative Litigation demonstrates the value of an independent, well-functioning board or committee in negotiating an acquisition transaction. The directors in the case came away looking at best "less than adroit"; other directors can avoid this result by negotiating vigorously at arm's length with their main goal being to act in the best interest of the stockholders.
