The decision in The American Bottling Company v. BA Sports (“American Bottling”) demonstrates that in the context of anti-assignment or change of control provisions, prohibitions against “indirect transfers” (such as those occurring at an entity’s great-grandparent level) are not necessarily triggered by changes at the parent level. This ruling from the Delaware Superior Court, which applied Illinois law, tracks similar rulings applying Delaware law.
The Delaware Court of Chancery in In re Straight Path recently applied the state’s professional conduct rules to prohibit Special Committee counsel from both appearing as a fact witness at trial and representing former Special Committee members in the same trial. In so doing, the Court offered its most recent consideration of Delaware Rules of Professional Conduct 3.7(a), which precludes a lawyer in most circumstances from “advocat[ing] at a trial in which the lawyer is likely to be a necessary witness.”
The headline-generating Twitter-Musk saga has caused the Court’s rapid-fire issuance of more than 30 letters and memorandum opinions. Others have already been discussed on this blog. Another among them is notable for the Court’s consideration of whether Elon Musk waived privilege by sending and receiving otherwise privileged communications about the Twitter acquisition using his Tesla and SpaceX email addresses. This brief decision is an important reminder that yes, it does matter which email address you use to communicate about otherwise privileged matters. (more…)
The on-then-off-then-on-again acquisition of Twitter, Inc. by Elon Musk has generated an unusual amount of attention for corporate litigation. Much of that has focused on the “main show” – the litigation commenced by Twitter seeking to compel Musk to close the transaction. Recently, however, the Delaware Court of Chancery issued a decision in a companion case, brought against Musk directly on behalf of a class of Twitter stockholders. (more…)
Recently, the Delaware Court of Chancery issued another ruling regarding the sale of Authentix Acquisition Company, Inc. (“Authentix”) to Blue Water Energy LLP (“Blue Water”), which was approved in 2017 by Authentix’s Board of Directors (the “Board”) and its controlling stockholders. The June 3, 2022 decision (Manti Holdings, LLC v. Carlyle Group Inc., C.A. No. 2020-0657-SG, 2022 WL 1815759 (Del. Ch. June 3, 2022)) denied in part a motion to dismiss and held that the gravamen of the plaintiffs’ post-closing money damages complaint—allegations that the defendants breached fiduciary duties regarding the sale—sufficiently stated claims upon which relief could be granted. The ruling underscores the need for heightened care by target companies and their equity sponsors when contemplating a transaction supported by an equity sponsor, including in their communications (or lack of communications) with management and other shareholders.
Parties to commercial agreements often include provisions that seek to remove or limit potential roadblocks to injunctive relief in the event of a breach. A recent decision from the Delaware Chancery Court shows that one such provision — the waiver of a bond requirement for a preliminary injunction — is not ironclad.
Readers who have been around for the past couple of decades will recall well a simpler time in our national politics, when the leader of the free world contended that he had not lied when telling aides, regarding a relationship with a White House intern, that “There’s nothing going on between us” because “It depends on what the meaning of ‘is’ is.”
Vice Chancellor Laster recently delivered a lecture at the University of Iowa College of Law focused on attorney ethics. As followers of this blog know, Vice Chancellor Laster has issued several M&A decisions that feature factual findings regarding attorney conduct. Three of them – the so-called “A-Trilogy” – were the subject of his presentation (AB Stable; Anthem; and Akorn). (more…)
Being asked to join the board of directors of a public corporation is an honor. Board membership can be an enriching experience and an avenue for personal and professional growth. However, in an increasingly litigious, regulated and complex public company landscape, director candidates should conduct thoughtful and targeted due diligence on a company and its existing board practices before committing to a role that should be expected to extend over multiple years. The following are ten questions director candidates should ask themselves and the prospective company. The answers to many of these questions can be found in a company’s public disclosures. To demonstrate diligence and an earnestness in learning more about a company, a prospective board candidate may choose to start there before confirming the answers through conversations with current and former directors, senior management or a recruiter. (more…)
Sidley is pleased to share the March 2022 issue of Sidley Perspectives on M&A and Corporate Governance, a quarterly newsletter designed to keep you current on what we consider to be the most important legal developments involving M&A and corporate governance matters. (more…)