Tuesday, October 9, 2007
Sallie Mae filed suit in Delaware Chancery Court to compel the consortium of private equity firms and banks that agreed to buy the company for $25 billion to go through with the deal or pay the $900 termination fee. Citing the "material adverse effect" clause based on the federal government's cut of student loan subsidies, the buyers have sought to renegotiate the price. NYTimes, Sallie Mae Sues to Force a Buyout; WSJ, SLM Escalates Battle, Sues J.C. Flowers Group.