This is the second live installment from the above 2009 corporate law seminar in New Orleans. Among the other bloggers posting live, see, e.g., here.
As a follow-up to my last post, the panel presentation of this afternoon is entitled:
Public Company M & A in 2009: What to Expect? The moderators are Victor Lewkow and James Morphy, Jr. The panel members include a Vice Chancellor of the Delaware Chancery Court.
MAC clauses were discussed. The member of the Chancery Court on the panel provided his perspective on MAC clauses by suggesting that recently there seem to be less "outs" in contracts, and Delaware strongly supports contract rights. There is a tension between a MAC clause and a "break-up fee" if the deal is not consummated. The "downside" of the position that strongly honors contracts, is that it puts pressure on financing parties when there is no "financing out". A problem develops if the agreement does not allow specific performance and one does not have a deal, then one is only left with the unpalatable option of "chasing" the termination fee.
Ted Mirvis of Wachtell Lipton discussed remedies in the context of merger agreements. Among the many issues he addressed, include the discussion of the different treatment of third party beneficary rights addressed in the Delaware decision in Amirsaleh compared with the New York decision in Con Ed
The Omnicare case was discussed and juxtaposed with the need for "deal certainty". The point was made that the analysis may be different when viewed from an "equitable as opposed to law" lens. In that context, a transcript of a decision by the Delaware Chancery Court in the case of
Optima International of Miami, Inc. v. WCI Steel, Inc., (Lamb, V.C., transcript, June 27, 2008),
was cited for the position that Omnicare is not violated when there is shareholder consent and the controlling shareholder owns less than 50% (and such consent is not prohibited by charter). However, the SEC recently made an interpretation that such consent cannot be used if there is any non-cash consideration requiring an S-4.