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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