M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

A Member of the Law Professor Blogs Network

Monday, May 18, 2009

Contingent Value Rights and the new M&A

That the credit crisis has created a challenging deal environment is an understatement.  Firms that might otherwise have been in the market as a acquirers are unable to secure the credit necessary to make deals happen.  Potential sellers are sitting on very low valuations and, rightfully, are not willing to sell.  Enter contingent value rights.  A recent Reuters piece noted the increasing use of contingent value rights as a way to help cross the divide between lack of financing and the valuation problem (here).  In theory, contingent value rights, like earnouts, are elegant solutions to these problems, but in practice at least they can also be the source of more than a little bit of legal hassle.  One wonders how transactions with CVRs that have been structured in these bad times will play out over time.  I'll keep my eye out and will report back to be sure. 

-bjmq

May 18, 2009 | Permalink | Comments (1) | TrackBack (0)

Welcome Back!

This blog has been silent for a few months now, but silent in a good way.  Steve Davidoff, who got this blog going, has gone on to much bigger and better things and now reaches a very broad audience through his "Deal Professor" blog over at the NY Times' Dealbook.  Starting today, I'll be taking over this blog together with Mike Woronoff, who I hope will drop in later today to introduce himself.  Me?  I'm an assistant professor at Boston College Law School.  I teach Corporations, Mergers & Acquisitions, as well as a Deals course.   I expect to be sharing my thoughts on a number of areas of perhaps mutual interest as they relate to corporate law, teaching, and research in the corporate and M&A space.  Also, given my teaching interests I'll also be writing some on "deals".  


For now, I'd just like to thank Paul and Joe for handing over the keys to this blog to Mike and I.  Also, I'd like to thank Steve for the fine work he did in the time he was posting here.  I'm sure that no small amount of the traffic that comes to this page on a regular basis is coming because of him.  

- bjmq

May 18, 2009 | Permalink | Comments (0) | TrackBack (0)