{"id":50,"date":"2014-12-12T17:32:20","date_gmt":"2014-12-12T21:32:20","guid":{"rendered":"http:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/?p=50"},"modified":"2014-12-12T17:32:20","modified_gmt":"2014-12-12T21:32:20","slug":"a-bit-about-break-up-fees-in-ma","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/2014\/12\/12\/a-bit-about-break-up-fees-in-ma\/","title":{"rendered":"A Bit About Break-up Fees in M&amp;A"},"content":{"rendered":"<p>In<a href=\"http:\/\/courts.delaware.gov\/opinions\/download.aspx?ID=215210\">\u00a0<em>In re Comverge, Inc. Shareholders Litig<\/em><\/a>., C.A. No. 7368-VCP, a decision on a motion to dismiss by Court of Chancery,\u00a0Vice Chancellor Parsons provided practitioners and clients with a thorough and helpful analysis (essentially a\u00a0road-map) of\u00a0 how the Court of Chancery\u00a0reviews challenges to third-party\u00a0sale transactions, that are\u00a0approved by a disinterested board, under the enhanced scrutiny of <em>Revlon<\/em>.\u00a0\u00a0In addition to the primer\u00a0on a <em>Revlon<\/em> analysis, the opinion is worth a read for its discussion of\u00a0what the Court considers the outer bounds\u00a0for break-up fees.\u00a0 The Vice Chancellor allowed claims challenging the break-up fees in this transaction to go forward because,\u00a0when viewed in the aggregate, they\u00a0could total north of 11% of the equity value.\u00a0 For purposes of this motion, the Vice Chancellor accepted the plaintiff&#8217;s argument that a convertible note held by the buyer, if converted, could add more than $3 million to the purchase price if another bidder emerged, and thus should be considered an enhancer of the termination fees.\u00a0 The Vice Chancellor held he could not dismiss this claims because it is reasonably conceivable that the plaintiffs might be able to show that this decision by the board was so far\u00a0out of bounds as\u00a0to be only explainable as \u201cbad faith\u201d\u2014and thus not exculpable under a Section 102(b)(7) exculpatory clause.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In\u00a0In re Comverge, Inc. Shareholders Litig., C.A. No. 7368-VCP, a decision on a motion to dismiss by Court of Chancery,\u00a0Vice Chancellor Parsons provided practitioners and clients with a thorough and helpful analysis (essentially a\u00a0road-map) of\u00a0 how the Court of Chancery\u00a0reviews challenges to third-party\u00a0sale transactions, that are\u00a0approved by a disinterested board, under the enhanced scrutiny of &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/2014\/12\/12\/a-bit-about-break-up-fees-in-ma\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;A Bit About Break-up Fees in M&amp;A&#8221;<\/span><\/a><\/p>\n","protected":false},"author":108,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[71,70,72],"ppma_author":[153],"class_list":["post-50","post","type-post","status-publish","format-standard","hentry","category-general","tag-ma","tag-revlon","tag-termination-fees"],"authors":[{"term_id":153,"user_id":108,"is_guest":0,"slug":"rlrenck","display_name":"Richard L. Renck","avatar_url":"https:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/wp-content\/uploads\/sites\/16\/2014\/08\/renckrichard-125x150.jpg","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/wp-json\/wp\/v2\/posts\/50","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/wp-json\/wp\/v2\/users\/108"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/wp-json\/wp\/v2\/comments?post=50"}],"version-history":[{"count":0,"href":"https:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/wp-json\/wp\/v2\/posts\/50\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/wp-json\/wp\/v2\/media?parent=50"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/wp-json\/wp\/v2\/categories?post=50"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/wp-json\/wp\/v2\/tags?post=50"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/delawarebusinesslaw\/wp-json\/wp\/v2\/ppma_author?post=50"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}