The Delaware Court of Chancery recently explained the calculation of a put price for units in PECO Logistics, LLC v. Walnut Investment Partners, L.P. The LLC Agreement provided as following methodology for calculating the Put Price; “Total Equity Value” means the aggregate proceeds which would be received by the Unitholders... Read More
Broc Romanek of TheCorporateCounel.net noted in this blog that “Recently, Nasdaq solicited comment on its shareholder approval rules. It’s a broad – and general – request since the rules haven’t changed much in the 25 years since they were adopted. Nothing specific is proposed – so this is sort of... Read More
In Prairie Capital III, L.P. v. Double E Holding Corp. the Delaware Court of Chancery examined exclusive representations and integration clauses, omissions and exclusive remedies provisions. The opinion notes: Delaware law enforces clauses that identify the specific information on which a party has relied and which foreclose reliance on other... Read More
Registered statements are “declared effective” by the SEC; Regulation A+ offering documents are “qualified” by the SEC, and when it happens an EDGAR document called “QUALIF” is generated. Per my review, the following Regulation A+ transactions that were filed after the effective date of the Regulation A+ rules have been... Read More
In Kerbawy v. McDonnell, the Delaware Court of Chancery affirmed the validity of a solicitation of written consents that removed certain directors and appointed new directors. A key theme of the opinion is that stockholders are free to act unilaterally by written consent and an incumbent board is not entitled... Read More
Gore, et al., v. Al Jazeera America Holdings I, Inc. emphasizes not only the necessity to carefully draft indemnification claim provisions in merger agreements but the need to carefully draft indemnification claims as well. Here plaintiffs were the sellers of the business and were contesting indemnification claims. The case was... Read More
In Fox v. CDX Holdings, Inc., the Delaware Court of Chancery held that option holders could not be burdened by an escrow imposed on equity holders in a merger transaction when the terms of the option plan did not permit the escrow to be imposed. The option conversion provision of... Read More
Tiny deals can bring large complications. Mannix v. PlasmaNet, Inc. involved appraisal rights in a merger where the merger consideration, after adjustments, amounted to $114,000, to be split amongst 19,307,715 shares, or roughly six-tenths of a penny per share. Under Section 262(e) of the DGCL, there need be only one... Read More
Everyone knew the SEC would pursue a marquee-name private equity sponsor for misallocating expenses. It finally happened, with KKR settling charges for misallocating “broken deal” expenses. Charges against others are likely to follow over time. According to the SEC an investigation found that during a six-year period ending in 2011,... Read More
The stockholders of Cyveillance, Inc., sold their company for $40 million up-front and a $40 million earn-out if the company’s revenues reached a certain level. Section 5.4 of the merger agreement prohibited the buyer from “tak[ing] any action to divert or defer [revenue] with the intent of reducing or limiting... Read More