Page 18 - Material Adverse Effect News Today

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Highlights Applying New York law, the U.S. District Court for the Southern District of New York rules that a party can invoke a contractual force majeure provision to terminate a contract on the ground that the COVID-19 pandemic and resulting government-imposed restrictions on business operations fit within the meaning of a "natural disaster." The courts ruling joins the growing list of jurisdictions that have interpreted "natural disaster" to extend beyond weather-related and environmental di...

To print this article, all you need is to be registered or login on Mondaq.com. This is part five of a series focusing on current M&A trends, opportunities and challenges. With positive news with respect to vaccines, there are reasons for optimism that the worst of the COVID-19 pandemic and the corresponding governmental health restrictions may ease in 2021. However, it also seems increasingly clear that this easing is still months away, and that pandemics and other unf...

[co-author: Meg Williams - Articling Student] In Fairstone Financial Holdings Inc v Duo Bank of Canada, Koehnen J. of the Ontario Superior Court of Justice (Commercial List) had the opportunity to further the limited jurisprudence on material adverse change/material adverse effect (MAE) clauses. Unsurprisingly, this jurisprudence has become more prominent as a result of the suddenness and uncertainty of the COVID-19 pandemic. In this decision, Koehnen J. considered the applicability of an MAE ...

In Fairstone Financial Holdings Inc v Duo Bank of Canada, Koehnen J. of the Ontario Superior Court of Justice (Commercial List) had the opportunity to further the limited jurisprudence on material adverse change/material adverse effect (MAE) clauses. Unsurprisingly, this jurisprudence has become more prominent as a result of the suddenness and uncertainty of the COVID-19 pandemic. In this decision, Koehnen J. considered the applicability of an MAE clause and other covenants in a share purchase...

Key Points In AB Stable VIII LLC v. Maps Hotels and Resorts One LLC, the Delaware Court of Chancery issued a precedential decision addressing whether a buyer could walk away from an M&A transaction because the target company’s responses to the COVID-19 pandemic constituted either (1) a “material adverse effect” (MAE) or (2) a breach of the covenant to operate in the ordinary course of business between signing and closing (“Ordinary Course Covenant”). Although the MAE definition did n...

To embed, copy and paste the code into your website or blog: On November 30, 2020, Vice Chancellor Laster of Delaware’s Court of Chancery issued the first case where the pandemic provided a company with the ability to walk away from its contractual obligations in a sale transaction, analyzing both the material adverse effect (“MAE”) provisions and ordinary course covenants. AB Stable VIII LLC v. MAPS Hotels and Resorts One LLC et al., C.A. No. 2020-0310-JTL (Del. Ch. Nov. 30, 2020). The ...