Termination Fees in Public and Private Acquisitions: Drafting Forward and Reverse Breakup Fees
Using Fees to Allocate Risk and Ensure Deal Certainty; Case Law on Enforceability
Recording of a 90-minute premium CLE webinar with Q&A
This CLE course will provide M&A counsel with guidance on the negotiation and drafting of forward and reverse breakup fee provisions in acquisition agreements. The panel discussion will include the purpose of termination fees for both the acquirer and the target, how they can impact other aspects of the deal, and recent decisions on enforceability of breakup fees.
- Motivations behind breakup fees for target and acquiring entity
- Forward breakup fees: triggers in deals generally
- Acceptance of better proposal
- Change of heart
- Additional triggers for forward breakup fees in public company deals
- Fiduciary out: target company's board changes its view about the advisability of the transaction
- Tail period
- Rejection or no vote by stockholders on the transaction
- Breach of the no-shop or stockholder meeting covenant
- Reverse breakup fees for failure of acquirer to close: financing and other contingencies
- Enforceability of breakup fees: New York and Delaware approaches
The panel will review these and other relevant issues:
- How can forward breakup fees benefit both parties to an acquisition agreement?
- Should fees vary depending on a public target's reason for terminating a deal? What is market?
- Should reverse breakup fee provisions put any financing contingency solely on the acquirer?
- How have Delaware and New York courts traditionally viewed termination fees?
Joseph B. Conahan
Partner/Co-Chair, Mergers and Acquisitions Practice
Wilmer Cutler Pickering Hale and Dorr
Mr. Conahan’s practice focuses on the representation of buyers, sellers and boards of directors in mergers,... | Read More
Mr. Conahan’s practice focuses on the representation of buyers, sellers and boards of directors in mergers, acquisitions, divestitures, joint ventures and other strategic transactions in the life sciences, technology, FinTech and industrial sectors, as well as on counseling public companies on complex governance and disclosure matters. Mr. Conahan recently served as co-chair of the Boston Bar Association’s Mergers & Acquisitions Committee and co-chaired the advisory committees for the Boston Bar Association's 2016 M&A Conference and 2017 M&A Conference.Close
Orrick Herrington & Sutcliffe
Mr. Hacohen is a member of the firm’s Global Mergers & Acquisitions and Private Equity Group. He represents... | Read More
Mr. Hacohen is a member of the firm’s Global Mergers & Acquisitions and Private Equity Group. He represents U.S. and multinational public and private company clients in a variety of transactions and across industries, including domestic and cross-border mergers, acquisitions, dispositions, private placements and restructurings. Mr. Hacohen also advises boards of directors and shareholders in all aspects of New York and Delaware corporate, partnership and limited liability company law, including corporate governance and fiduciary duty matters. In addition, he represents numerous early- and growth-stage technology companies (with a particular focus on Israeli-related companies) in equity and debt financing rounds and general corporate matters.Close
Orrick Herrington & Sutcliffe
Mr. Talarides is a Partner in the White Collar, Investigations, Securities Litigation & Compliance group. His... | Read More
Mr. Talarides is a Partner in the White Collar, Investigations, Securities Litigation & Compliance group. His practice focuses on defending companies and their officers and directors in securities class actions, shareholder derivative actions, mergers and acquisition litigation, and regulatory proceedings.Close