Wake Up Call for Private M&A Deal Structuring

December 15, 2014

The widespread practice, in private acquisitions, of combining a “merger” acquisition structure with release, indemnification, escrow, and other arrangements, which purport to bind the target stockholders, has received a jolt from a new Delaware Chancery Court decision. The attached alert memo:

  • Spells out the implications for the spectrum of obligations that acquirors seek from target stockholders in private acquisitions; and
  • Provides guidance for acquirors on best practices and structures to consider employing to address the serious concerns raised by the Court.