Negotiating and Navigating the Fraud Exception in Private Company Acquisitions

Key Considerations For Drafting a Fraud Exception to an M&A Contractual Indemnification Provision

Recording of a 90-minute CLE webinar with Q&A


Conducted on Wednesday, March 22, 2017
Recorded event now available


This CLE webinar will examine the game-changing role the fraud exception could play in private target M&A agreements, with a focus on properly contouring limitations on indemnification and other remedies based on fraud claims.

Description

Could one party’s optimism be another party’s fraud? High profile busted deals remind us that, when fraud looms, all bets are off on those otherwise carefully crafted contractual provisions so typical in M&A deals.

For venture capitalists and other financial sellers in particular, thoughtful limitations on liability could make the difference between a “good deal” and a “not worth it deal.” For buyers, it could mean the difference between being a “visionary CEO”—or a “hapless CEO.”

Our panel of seasoned M&A attorneys, with a strong dose of reality from a Delaware litigator’s perspective, will illustrate the role of the fraud exception in private company acquisitions, highlighting negotiation and drafting strategies to help you deftly put the genie back into the 11th-hour bottle.

Listen as our panel discusses critical considerations when drafting a fraud exception to an indemnification provision, strategies that can be implemented for seller or buyer when negotiating the fraud exception, and ways to juggle competing interests of multiple selling stockholders (e.g., lead vs. coattail investors).

Outline

  1. What is a fraud exception and who cares?
  2. Recent case law impacting fraud remedies in M&A
  3. Practical negotiation strategies

Benefits

The panel will review these and other key issues:

  • What strategies can be implemented for limiting (for seller) or preserving (for buyer) the fraud remedy’s “Sword of Damocles?”
  • What critical considerations should counsel contemplate when drafting a fraud exception to an indemnification provision?
  • How can counsel best juggle competing interests of multiple selling stockholders (e.g., lead vs. coattail investors)?

Faculty

Wilson Chu, Partner
McDermott Will & Emery, Dallas

Mr. Chu’s practice focuses on M&A, joint ventures, and other strategic transactions, as well as, related corporate governance, for clients ranging from Fortune 500 serial acquirers to private equity funds to high-growth, high-profile technology companies in the United States and abroad. As the creator of the American Bar Association's influential M&A Deal Points Studies, Mr. Chu is widely recognized for his thought leadership that continues to shape M&A practice nationally and globally. 

P. Gregory Hidalgo, Partner
McDermott Will & Emery, Dallas

As a transactional and securities lawyer, Mr. Hidalgo counsels and provides innovative and client-centered solutions for publicly held and privately owned clients in the areas of mergers and acquisitions, joint ventures, securities transactions, corporate governance and other general corporate matters. He is a frequent lecturer on a variety of M&A topics.

Jessica C. Pearlman, Partner
K&L Gates, Seattle

Ms. Pearlman represents companies in various corporate, securities and finance matters, with an emphasis on M&As for both public and private clients, domestic and international. She chairs the Mergers & Acquisitions Market Trends Subcommittee of the M&A Committee of the ABA’s Section of Business Law and is a member of the Thomson Reuters Business Law Solutions Advisory Board.

Srinivas M. Raju, Director
Richards Layton & Finger, Wilmington, Del.

Mr. Raju focuses his practice on corporate advisory, corporate governance, transactional, and complex litigation matters relating to Delaware corporations and alternative entities. He litigated numerous corporate control, corporate governance, and contractual disputes in the Delaware Court of Chancery and the Delaware Supreme Court. He is a lecturer and author on fiduciary duty and governance issues.


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Mergers and Acquisitions Law Advisory Board

Charles H. Baker

Partner

DLA Piper

Igor Kirman

Partner

Wachtell Lipton Rosen & Katz

Kevin C. Logue

Partner

Paul Hastings Janofsky & Walker

Mark D. Williamson

Principal

Gray Plant Mooty

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