November 19, 2007
The efforts of Cerberus Capital Management and others to walk away from buyout agreements reproves a truism. Clients under appreciate legal language until times get tough. Legal language is usually the most important when risk manifest and once stellar deals go south in value. Unfortunately, lawyers often also take the language for granted, relying on old stock forms. With the busted buyouts look for radical, and overdue, redrafting of MAC (Material Adverse Change) and breakup fee clause in all future deals. The stock forms will change -- for the better.
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