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Promises Made To Be Broken? Standstill Agreements In Change Of Control Transactions, Christina M. Sautter
Promises Made To Be Broken? Standstill Agreements In Change Of Control Transactions, Christina M. Sautter
Christina M. Sautter
Many promises are made in the negotiation of a merger but not all promises are necessarily enforceable or consistent with a board of directors’ fiduciary duties. This article explores the enforceability of one such promise: the buyer’s standstill agreement. When a publicly traded company explores a sale, that company, the target, customarily requires each potential buyer to execute a standstill agreement. A typical standstill prevents potential buyers from publicly making or announcing a bid for the target during the sale process without the target’s prior consent and for a period of approximately twelve to eighteen months from the conclusion of …
Auction Theory And Standstills: Dealing With Friends And Foes In A Sale Of Corporate Control, Christina M. Sautter
Auction Theory And Standstills: Dealing With Friends And Foes In A Sale Of Corporate Control, Christina M. Sautter
Christina M. Sautter
A fundamental issue in Delaware mergers & acquisitions (M&A) law is the extent to which a target company’s board of directors may restrict a sales process to extract value from bidders and grant a “winning bidder” certain deal protections to protect a transaction from being overbid. Standstill agreements are one such form of deal protection. Standstills prevent bidders from making or announcing a bid for the target without the target’s consent both during the sales process and for a period after the sales process is completed and the target has executed an agreement with a “winning bidder.” Recent 2011 and …
Rethinking Contractual Limits On Fiduciary Duties, Christina Sautter
Rethinking Contractual Limits On Fiduciary Duties, Christina Sautter
Christina M. Sautter
The recent financial crisis has placed a renewed focus on completion risk in the world of mergers and acquisitions. Dealmakers have increasingly attempted to control for such risks by altering merger agreement provisions to achieve a greater level of deal certainty. This Article addresses one such provision – the merger recommendation covenant and its related fiduciary out. The purpose of the merger recommendation fiduciary out is to address a tension created by two fundamental precepts arising under corporate law and contract law – a board of director’s duties to the corporation and its stockholders versus the binding covenants of a …