Special Committees in M&A Transactions: Formation, Member Composition, Negotiating and Approval Authority
Mitigating Conflicts of Interest and Director Liability: Business Judgment Rule vs. Entire Fairness Standard
Recording of a 90-minute premium CLE video webinar with Q&A
This CLE course will examine the use of special committees in M&A transactions where directors or significant shareholders have a conflict of interest. The panel will discuss the formation of a special committee, the committee's role in evaluating and negotiating a proposed transaction, how the committee should interact with the board and third parties, and application of business judgement rule vs. the fairness standard on judicial review.
Outline
- Directors' duty of care in M&A transactions: the business judgment rule
- Conflicts of interest and the "entire fairness" standard of review
- Key components of a special committee
- Disinterested and independent members with sufficient expertise
- Authority to evaluate, negotiate, and reject a transaction in the same manner as a non-conflicted board
- Third-party advisers
- Reasonable compensation
- Deciding when a special committee is necessary
Benefits
The panel will review these and other critical issues:
- What kinds of transactions might make the appointment of a special committee necessary?
- What is the process of creating a special committee? What should the formation resolution say?
- What factors should be considered in appointing members to the committee?
- How does a special committee impact a court's decision to apply the business judgment rule or the fairness standard in examining board actions?
Faculty
Francis J. (Frank) Aquila
Partner
Sullivan & Cromwell
During the course of his career, Mr. Aquila has advised on deals totaling more than $1 trillion in value, including... | Read More
During the course of his career, Mr. Aquila has advised on deals totaling more than $1 trillion in value, including advising on more than $150 billion in 2015 and more than $100 billion in 2019. He has been called upon by global leaders such as Amgen, Andeavor, Anheuser-Busch InBev, Baxter International, Biohaven Pharmaceuticals, Canadian Pacific, Cheniere Energy, Cornerstone Building Brands, Diageo, Diebold Nixdorf, GameStop, Haleon, International Airline Group, Kering, Kraft, Navistar International, Novartis, Tiffany & Co. and United Rentals to advise them and their boards of directors on M&A, corporate governance, ESG, activism, proxy contests, unsolicited bids, ransomware attacks, short squeezes, crisis management and a range of matters affecting corporate policy and strategy. Mr. Aquila is a member of the firm’s Management Committee and is the firm’s Senior M&A Partner. Previously, he was Global Head of the firm’s M&A Practice and Co-Managing partner of the firm’s General Practice Group (the Firm’s global corporate practice).
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James E. Langston
Partner
Cleary Gottlieb Steen & Hamilton
Mr. Langston’s practice focuses on public and private merger and acquisition transactions and activism defense.... | Read More
Mr. Langston’s practice focuses on public and private merger and acquisition transactions and activism defense. He has significant experience in both cross-border and domestic transactions, including conflict transactions, mergers-of-equals, LBOs, joint ventures, and carve-out transactions. Mr. Langston also frequently represents companies and their board of directors on takeover defense and shareholder activism situations. He is a frequent author and lecturer on M&A legal issues.
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Youmna Salameh
Director
Houlihan Lokey
Ms. Salameh is a Director in Houlihan Lokey’s Board and Special Committee Advisory practice, where she focuses on... | Read More
Ms. Salameh is a Director in Houlihan Lokey’s Board and Special Committee Advisory practice, where she focuses on public company special committee representations. She has deep expertise in M&A, financing, and special situations involving controlling stockholders, related-party dynamics, inbound offers, and dual-class stock structures. Ms. Salameh specializes in helping clients navigate complex situations and conflict-prone transactions involving the need for heightened sensitivity around corporate governance considerations. Ms. Salameh has more than 15 years of experience in advising companies in a variety of situations, including mergers and acquisitions, capital raises, recapitalizations, and strategic alternatives assessments.
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