M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

Thursday, September 1, 2011

Adams on the Contract Process

While I don't always agree with his point of view (including, ironically, his view that there should be no disagreements, because there is only one right answer for all drafting issues), Ken Adams is almost always thought provoking when discussing contract process issues.  He has just made available this hyperlinked list of all of his blog posts relating to the contract process.


September 1, 2011 in Contracts | Permalink | Comments (1) | TrackBack (0)

Wednesday, August 31, 2011

US sues AT&T over T-Mobile deal


Here's the DOJ's press release, and an excerpt:

“The combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services,” said Deputy Attorney General James M. Cole.  “Consumers across the country, including those in rural areas and those with lower incomes, benefit from competition among the nation’s wireless carriers, particularly the four remaining national carriers.   This lawsuit seeks to ensure that everyone can continue to receive the benefits of that competition.”

“T-Mobile has been an important source of competition among the national carriers, including through innovation and quality enhancements such as the roll-out of the first nationwide high-speed data network,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.   “Unless this merger is blocked, competition and innovation will be reduced, and consumers will suffer.”  

And here's a copy of Justice's ATT/TMobile Complaint.

 AT&T and T-Mobile respond via their mobilizeeverything.com website:

We are surprised and disappointed by today’s action, particularly since we have met repeatedly with the Department of Justice and there was no indication from the DOJ that this action was being contemplated.

We plan to ask for an expedited hearing so the enormous benefits of this merger can be fully reviewed. The DOJ has the burden of proving alleged anti-competitive effects and we intend to vigorously contest this matter in court.




August 31, 2011 | Permalink | Comments (0) | TrackBack (0)

Tuesday, August 30, 2011


From an H-P spokesman (via Reuters):

We prefer a spin-off as a separate company and the working hypotheses is that a spin-off will be in the best interests of HP's shareholders, customers and employees," a HP spokeswoman said. "However, we have to complete the diligence process and validate this assumption, including fully understanding the dis-synergies in separating the PSG business from HP.

Spin-offs are always interesting transactions - particularly since they are often used to disentangle a firm from an earlier mistake (e.g. TimeWarner's spin-off of AOL last year).  The H-P spin-off of its personal systems group will be interesting because it looks like it's part of a strategy to bury H-P. Al Lewis at the WSJ previously weighed in how a spin-off might be value-destroying for H-P.  I'm still wondering why they think this is a good idea.  It seems like there may be many "dis-synergies".


August 30, 2011 | Permalink | Comments (0) | TrackBack (0)

Innkeepers challenges Cerberus on MAC

So now Innkeepers has filed a complaint against Cerberus in the SDNY challenging Cerberus' decision to call a MAC on its acquisition of Innkeepers.  

The MAC as it appears in the Commitment Letter is as follows:

The occurrence of any condition, change or development that could reasonably be expected to have a material adverse effect on the business, assets, liabilities (actual or contingent), or operations,  condition (financial or otherwise) or prospects of the Fixed/Floating Debtors taken as a whole . . . 

Here's the Innkeepers' complaint. They are looking for specific performance. The crux of their argument is that while there may have been some market volatility recently, there has been no material adverse change.  Consequently, there is no basis for Cerberus to walk away from the transaction.  Indeed, Innkeepers argues that the subject of the MAC clause - the Fixed/Floating Debtors - are doing just fine, thank you very much.  Recent market volatility has - according to Innkeepers - is not relevant to the performance of the properties in question and in any event was foreseeable at the time of the contract.  They accuse Cerberus of trying to force a renegotiation of terms.

 My best guess is that Innkeepers has the better side of the argument here, although that's left to be seen.  We'll continue to follow this case as it develops.



August 30, 2011 in Material Adverse Change Clauses, Private Equity | Permalink | Comments (0) | TrackBack (0)