Disputes arise over closing conditions, covenant compliance between signing and closing, termination rights and fees, and whether a party may walk. The agreement's specific terms govern almost entirely.
Delaware law applies to most public company transactions.
Alternative Names:
Merger Agreement Litigation|Deal Agreement Dispute
Why it Matters?
The gap between signing and closing is where these disputes originate, since interim operating covenants restrict the target's conduct and a buyer seeking to exit will scrutinize compliance for a basis to terminate. Ordinary course covenants became heavily litigated when businesses altered operations under external pressure. Specific performance provisions determine whether a reluctant buyer can be compelled to close or merely pay a termination fee.
Frequently Confused with
Related terms
Frequently asked questions
Where do merger disputes originate?
Can a buyer be compelled to close?
