Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Friday, January 4, 2008

Failed Buyouts and Contract Language

Will the recent wave of failed LBOs lead to revisions in the contract language about remedies for non-performance?  Some experts suggest that, in addition to negotiations over price, parties will bargain harder over the terms, with sellers seeking stronger financing guaranties and larger break-up fees.  This renewed attention comes about after a recent Delaware Chancery opinion that found that the contract language in the Cerberus-United Rentals deal was "hopelessly conflicted" on the issue of specific performance.  NYTimes, As Buyouts Falter, New Tactics Aim to Lock in Deals.

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