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Delaware Ruling Guides Businesses with Mergers and Acquisitions
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Delaware Court of Chancery Decision Provides Guidance on M&A Earnouts | Sheppard Mullin Richter & Hampton LLP
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In
Shareholder Representative Services LLC v Albertsons Companies, Inc., the aggrieved former shareholders of DineInFresh, Inc., d/b/a Plated, sought recovery of earnout consideration from Plated’s acquirer, Defendant, Albertsons Companies, Inc. Plated had failed to reach any of the earnout milestones set forth in the Merger Agreement and Albertsons, therefore, refused to make any earnout payments.
In the Merger Agreement, Albertsons had bargained for the right to operate Plated post-closing in its discretion. However, the foregoing right was limited by Albertson’s express commitment not to operate Plated in a manner intended to avoid the obligation to pay the earnout.
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Chancery OKs Keker Van Nest $19.6M Fee In Shire Ruling
Law360 (April 27, 2021, 11:08 PM EDT) The Delaware Chancery Court Tuesday handed pharmaceutical company Shire a $19.6 million legal bill to cover a contingency fee owed to Keker Van Nest & Peters LLP after shareholders of a company Shire acquired won a dispute over a $45 million merger earnout.
Vice Chancellor Kathaleen S. McCormick swept aside Shire US Holdings Inc. s objections that the fee was excessive, noting that plaintiff Shareholder Representative Services LLC which represented stockholder claims to post-merger payments retained Keker Van Nest on a contingent fee basis because it was running out of cash needed to press what proved to be a winning.
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