Monday, October 15, 2007
Sallie Mae has asked Delaware Chancellor Leo Strine to expedite its breach of contract trial against the buyer group led by J.C. Flowers. Sallie Mae seeks completion of the LBO or payment of the $900 million breakup fee. It says that it is being held hostage by the buying group, because the agreement requires Sallie Mae to obtain permission for any major decisions prior to completing the deal. The buying group, in turn, is expected to file a counterclaim or its own lawsuit seeking a declatory judgment that the federal legislation cutting subsidies to the student lending industry is a material adverse event under the contract. NYTimes, Sallie Mae Seeks to Expedite Trial on Buyout; WSJ, Sallie Mae Seeks Expedited Trial In Buyout Suit.