Legal News

Last Thursday the U.S. Federal Trade Commission (FTC) announced that the FTC and the Antitrust Division of the U.S. Department of Justice (DOJ) will temporarily suspend granting early termination of the waiting period (ET) for filings made under the Hart-Scott-Rodino Act (HSR Act). Under the HSR Act’s Premerger Notification Program, the parties to a transaction must wait for expiration of the 30-day statutory waiting period (15 days for cash tender offers and certain bankruptcy transactions) t...

On February 1, 2021, the U.S. Federal Trade Commission (FTC) issued for publication in the Federal Register the annual revisions to the jurisdictional thresholds for the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act). The new thresholds are scheduled to become effective March 4, 2021 and will apply to transactions consummated on or after the effective date. The HSR Act requires the FTC to revise the thresholds annually based on changes in the gross national product (GNP)....By: W...

There are few things more fundamental to the sell-side private equity deal practice than, to the maximum extent possible, (1) establishing a contractual cap on post-closing liability for breaches of reps and warranties made by the target company or the selling stockholders and (2) contractually exonerating/releasing the selling entity’s human agents and nonparty affiliates from any exposure to tort liability arising from or related to the transactions that are the subject of the private company...

A recent ruling from the United States District Court for the Southern District of New York sent shock waves through the legal and financial community, with some shouting that this “could be a gamestopper for the private equity business.” Although the ruling in In re Nine West LBO Securities Litigation breaks new ground and arguably narrows the protections available to directors under the normally-broad business judgment rule, there are clear lessons others can take from this saga to prevent a...

The Department of Justice Antitrust Division (the “Division”) recently released updated guidance outlining when and how the Division will use arbitration in civil cases and merger investigations in the place of traditional litigation. The Division now encourages the use of arbitration in “appropriate” cases that would benefit from the use of such alternative dispute resolution techniques. The Divisions Approach to Arbitration - Historically, the Division has not used its authorization to....

Indemnification clauses are ubiquitous in commercial agreements of all types. In the M&A context, indemnification is a concept that applies most frequently in the contractual remedies regimes that are provided in private company acquisition agreements for breaches of representations and warranties, or for excluded liabilities. Indemnification is also a concept that arises in entity formation agreements for officers and directors in the corporate context, for members and managers in the limited.....

Over the last five years, many private equity market participants have become acquainted with a “GP-led secondary” transaction – i.e., a transaction where a private equity sponsor proposes to transfer all or a portion of the assets managed by an existing fund into a new “continuation” fund that will be managed by the same private equity sponsor. In such a transaction, the equity capital generally comes from a combination of “secondary” capital providers that are putting new money into the...

ON 11 NOVEMBER 2020 THE UK GOVERNMENT PUBLISHED ITS NATIONAL SECURITY AND INVESTMENT BILL. IF THE BILL IS ENACTED AND COMES INTO FORCE IN SUBSTANTIALLY ITS CURRENT FORM (WHICH SEEMS VERY LIKELY), IT WILL PROVIDE THE GOVERNMENT WITH WIDE-RANGING POWERS TO INTERVENE IN TRANSACTIONS ON NATIONAL SECURITY GROUNDS AND, IN RELATION TO CERTAIN KEY SECTORS, WILL REQUIRE MANDATORY PRE-CLEARANCE. The Bill reflects the Government White Paper published in July 2018 with some significant changes; in...By: We...

The mere allegation of fraud has the potential of wreaking havoc with the carefully negotiated limits on liability specifically set forth in private company acquisition agreements. This is particularly true for the private equity seller distributing the proceeds of a portfolio company sale to its limited partners in reliance upon those limits on post-closing liability. And the use of robust and properly placed anti-reliance clauses to limit the universe of purported representations as to which.....

Few things are more fundamental to M&A due diligence than determining whether any of the material contracts to which the target is a party require a counterparty’s consent as a condition to the proposed acquisition. And that determination is significantly influenced by the specific language set forth in the contract’s anti-assignment/change of control provision, as well as the form the proposed acquisition takes—i.e., whether the transaction is an asset purchase from the target, a purchase of...