M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

A Member of the Law Professor Blogs Network

Wednesday, June 17, 2009

Breaking the Bank

Last night's Frontline episode gives a blow-by-blow of the BoA/Merrill deal in crisp Frontline style.  Watch it over lunch at your desk.

For those of you keeping score at home, the material adverse change language is from the merger agreement is below.  Having it in front of you will come in handy at certain points while watching the show.

3.8 Absence of Certain Changes or Events. (a) Since June 27, 2008, no event or events have occurred that have had or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Company. As used in this Agreement, the term “Material Adverse Effect” means, with respect to Parent or Company, as the case may be, a material adverse effect on (i) the financial condition, results of operations or business of such party and its Subsidiaries taken as a whole (provided, however, that, with respect to clause (i), a “Material Adverse Effect” shall not be deemed to include effects to the extent resulting from (A) changes, after the date hereof, in GAAP or regulatory accounting requirements applicable generally to companies in the industries in which such party and its Subsidiaries operate, (B) changes, after the date hereof, in laws, rules, regulations or the interpretation of laws, rules or regulations by Governmental Authorities of general applicability to companies in the industries in which such party and its Subsidiaries operate, (C) actions or omissions taken with the prior written consent of the other party or expressly required by this Agreement, (D) changes in global, national or regional political conditions (including acts of terrorism or war) or general business, economic or market conditions, including changes generally in prevailing interest rates, currency exchange rates, credit markets and price levels or trading volumes in the United States or foreign securities markets, in each case generally affecting the industries in which such party or its Subsidiaries operate and including changes to any previously correctly applied asset marks resulting therefrom, (E) the execution of this Agreement or the public disclosure of this Agreement or the transactions contemplated hereby, including acts of competitors or losses of employees to the extent resulting therefrom, (F) failure, in and of itself, to meet earnings projections, but not including any underlying causes thereof or (G) changes in the trading price of a party’s common stock, in and of itself, but not including any underlying causes, except, with respect to clauses (A), (B) and (D), to the extent that the effects of such change are disproportionately adverse to the financial condition, results of operations or business of such party and its Subsidiaries, taken as a whole, as compared to other companies in the industry in which such party and its Subsidiaries operate) or (ii) the ability of such party to timely consummate the transactions contemplated by this Agreement.

 

-bjmq

http://lawprofessors.typepad.com/mergers/2009/06/breaking-the-bank.html

Current Events, Material Adverse Change Clauses, Mergers | Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341bfae553ef0115711dd514970b

Listed below are links to weblogs that reference Breaking the Bank:

Comments

I found the Frontline piece absolutely amazing in its recounting of what was and what was not known, by whom and when. The suppression of clearly material information from shareholders (seemingly encouraged/demanded by the government and acquiesced to by Lewis, et al) simply left me flabbergasted! The whole segment had a Woodward/Bernstein feel to it. So much so, in fact, that despite advances in technology allowing one to record such segments for later viewing, I instead found myself "shushing" my family for fear of missing even a millisecond of the coverage.

-NVH

Posted by: Nathan V. Herman | Jun 18, 2009 12:24:30 PM

Post a comment