Client Alert: Delaware Chancery Court Analyzes "Material Adverse Effect" in Merger Agreement

Client Alert: Delaware Chancery Court Analyzes "Material Adverse Effect" in Merger Agreement

Nov 19, 2008

Article

Brownstein Client Alert, November 19, 2008

We have seen recent developments in the interpretation of "material adverse effect" ("MAE") clauses in asset and stock purchase agreements under Delaware law which are of interest to private equity groups, in-house counsel, attorneys and others involved in negotiating mergers and acquisition agreements. Given the current unpredictability of the market and the inevitable wave of buyer's remorse, it is likely that MAE clauses will assume increasing importance as parties to purchase agreements seek to avoid closing transactions.

Click to read our Client Alert on the outcome of Hexion Specialty Chemicals v. Huntsman Corp.

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