Accredited Home Lender Deal Falls Apart

Lone Star, a private equity firm, has informed Accredited Home Lender Holding Company that it will not honor the stock acquisition agreement signed with the company.  Accredited Home has threatened to sue, binding Lone Star to the agreement.  The argument centers on whether the sub-prime lending market plunge triggers exit clauses in the agreement (including a MAC clause). We have another Tyson Foods case coming if this goes to court.  Several other private equity funds in "hanging buyouts" will watch this one closely.