M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

Friday, April 12, 2013

Call for Papers:

The AALS Section on Transactional Law and Skills is seeking paper proposals for its session at the 2014 Annual Meeting. 

The topic will be “Value Creation in the 21st Century,” and will feature a mini-symposium on Prof. Ron Gilson’s foundational article on value creation by business lawyers. 

Prof. Gilson has agreed to be one of the panelists.  We are looking for additional presenters pursuant to the call for papers, below:

Call For Papers

AALS Section on Transactional Law and Skills

Value Creation by Business Lawyers in the 21st Century

2014 AALS Annual Meeting

New York, NY

             In 1984, the Yale Law Journal published one of the foundational scholarly articles in the study of transactional law, Professor Ronald Gilson’s “Value Creation by Business Lawyers.”  In the years since its publication the article has fueled a robust debate on the role of business lawyers and the justification for the services they provide.  On the thirtieth anniversary of that influential article this program will re-examine Prof. Gilson’s thesis, evaluate the impact of the article, and discuss the prospects for business lawyers creating value in the 21st Century. 

             We are honored that Prof. Gilson has agreed to participate on the panel.  The other presenters will include invited participants, and authors of scholarly works selected from this call for papers.

             The Section on Transactional Law and Skills invites submissions of proposals for papers germane to the program description provided above.  We welcome any full-time faculty member of an AALS member school who has written an unpublished paper, is working on a paper, or who is interested in writing a paper on this topic to submit a 1 or 2-page proposal to the Chair of the Section by June 7, 2013.  The Executive Committee will review all submissions and select proposals. 

             Please direct all submissions and questions to the Chair of the Section, Eric Gouvin at the address below:

Eric J. Gouvin

Professor of Law and Director,

Center for Innovation & Entrepreneurship

Western New England University School of Law


(413) 796-2031


April 12, 2013 in Conference Announcements | Permalink | Comments (0) | TrackBack (0)

Wednesday, April 10, 2013

Forum selection bylaws in court today

The challenge to Chevron's forum selection bylaw is before Chancellor Strine today.  Here's the complaint.  I've blogged about these challenges before (here).  Although, I have advocated for forum selection provisions in corporate charters, forum selection bylaws are easier to adopt.  In part the ease of adoption exaplains why a number of firms put them in place in recent years. The ease of their adoptino is, however, their biggest weakness.  In a challenge before a federal district court in California (Galaviz v Berg), the judge ruled that forum selection provisions adopted as bylaws lacked "sufficient indicia of consent."  This wouldn't be a problem with forum selection provisions adopted at charter provisions.

Although other boards have dropped their bylaws in the face of legal challenges, Chevron has stuck to its guns.  Today we will get some sense whether the Delaware courts agree with the California federal court about the sufficiency of a bylaw for the purpose of narrowing possible forums.  Looks like the plaintiffs are hoping that the recent Delaware Supreme Court opinion in Pyott v La. Mun. will be enough to keep Chancellor Strine in line.  Maybe. 


April 10, 2013 in Cases, Delaware | Permalink | Comments (0) | TrackBack (0)

Tuesday, April 9, 2013

SRZ 2012 PE Buyer/Public Target Deal Study

Schulte Roth & Zabel has released this client alert containing the highlights from its most recent study on private equity buyer acquisitions of U.S. public companies with enterprise values in the $100-$500 million range ("middle market" deals) and greater than $500 million ("large market" deals). During the period from January 2010 to Dec. 31, 2012, SRZ identified a total of 40 middle market deals and 50 large market deals that met these parameters.  Here are SRZ's key observations from the study:

1.  Volatility in the number and terms of middle market deals makes it more difficult to identify "market practice" in that segment.

2. Overall, middle market deals took significantly longer to get signed than large market deals.

3. "Go-shop" provisions were used more frequently in large market deals, even though, overall, the percentages of middle market and large market deals in which a pre-signing market check was used are comparable.

4.  While it is virtually the rule (92% of the time in 2012) in large market deals that the target will have a limited specific performance right against the buyer, the full specific performance remedy is still used quite often (44% of the time in 2012) in middle market deals.

5.  While the frequency with which middle market deals use reverse termination fees ("RTFs") has converged on large market practice, the size of RTFs has not.

6.  Large market deals are much more likely than middle market deals to limit damages for buyer’s willful breach to the amount of the RTF.


April 9, 2013 in Break Fees, Deals, Private Equity, Transactions | Permalink | Comments (0) | TrackBack (0)

Default fiduciary duties coming for Delaware LLCs

There has been a back and forth between the Chancery Court and the Delaware Supreme Court about whether there are default fiduciary duties for LLCs.  The Chancery Court takes the position that there are default fiduciary duties, though you may contract around them.  The Supreme Court on the other hand take a more extreme, contractualist position.  The Chief Justice's position is that there are no default duties because the LLC form is a creature of contract.  If parties to an LLC have not contracted for fiduciary duties, then the Supreme Court will not enforce them upon the parties.  

It was over this topic that Chief Justice Steele recently called out Chancellor Strine for straying from the question before the court and moving out of his lane.  The judicial dust up got some attention at the recent Tulane gathering.

Now, it looks like the Delaware legislature will be stepping in to resolve this little dust up and guess who is going to win?  That's right, sanity prevails.  There are going to be default fiduciary duties for LLCs.  According to Pepper Hamilton

On March 20, 2013, legislation proposing to amend the Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101, et. seq. (DLLCA) was submitted to the Corporation Law Section of the Delaware State Bar Association. If the proposed legislation is enacted, the amendments, in addition to implementing certain technical changes, would confirm that LLC managers owe fiduciary duties where the LLC agreement is silent.

Expect to see this legislation enacted by the end of the summer.  Advantage Strine.


April 9, 2013 in Delaware | Permalink | Comments (0) | TrackBack (0)

More empty voting

A recent paper by Ringe, The Telus Saga, provides an additional example of empty-voting.  Until now, we have contented ourselves with the Mylan/King transaction.

Abstract: The recent conflict between Canadian telecommunications provider Telus and US-based hedge fund Mason Capital is the most recent illustration of 'empty voting' – a strategy whereby activist investors eliminate their risk exposure to shares in target companies to pursue idiosyncratic motives. As courts are struggling to find adequate solutions, regulators worldwide are called upon to provide reliable tools to this threat to shareholder voting.



April 9, 2013 | Permalink | Comments (0) | TrackBack (0)

Monday, April 8, 2013

Chinese merger review simplified

According to Davis Polk, MOFCOM in China is looking to simplify pre-merger review for a large class of relatively "simple" (read small) transactions.

The draft regulation – which is not dissimilar to draft proposals recently announced by the European Commission – designates as “simple” three (arguably narrow) cases premised upon the merging parties having low market share post-merger:

    • Horizontal mergers in which the parties together have under 15% share in a relevant market;
    • Vertical mergers in which the parties have (a) a vertical relationship, and (b) under 25% share in the “vertical market”; and
    • Mergers where the parties (a) do not have a vertical relationship, and (b) have under 25% share in all markets.

While in the US we use transaction size as the cut-off for initial review, the Chinese will be using market share.  Transaction size tests are arguably simpler to enforce and simpler for parties to get their head around.  On the other, market share tests will ensure plenty of work for lawyers.


April 8, 2013 in Antitrust, Asia | Permalink | Comments (0) | TrackBack (0)