Transaction insurance reshapes risk negotiations and post-close remedies

Transaction insurance reshapes risk negotiations and post-close remedies
By Ms. Elizabeth Cunnane & Mr. Saswat Bohidar & Mr. Christian McGrath

This session with Elizabeth Cunnane, Senior Vice President, M&A Group at Willis Towers Watson; Saswat Bohidar, Associate General Counsel, M&A and Ventures at Hewlett Packard Enterprise; and Christian McGrath, General Counsel & Managing Director at GTCR considered risk allocation frameworks.

The participants discussed the form and structure of closing conditions, looked at the increasing use of transaction insurance in high-value deals and in competitive processes, and discussed the strength of various protections and...

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Innovation in deal structures and forms of consideration

Innovation in deal structures and forms of consideration | M&A Conference at the University of Chicago
By Elizabeth Donley & Mr. Brett Shawn & Mr. Michael T. Wolf

This discussion at the M&A Conference at the University of Chicago examined deal structures and terms that may be employed to bridge gaps between buyers and sellers. 

Brett Shawn, Senior Vice President, Assistant General Counsel at Warburg Pincus; Michael Wolf, Vice President, Deputy General Counsel at Baxter International; and Elizabeth Donley, Partner at Hogan Lovells considered various forms of consideration and pricing formulations, including working capital and "locked-box" adjustments, fixed price/exchange ratio collars, valuation and earnout mechanisms, and other practical considerations relevant to M&A negotiations and...

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Aligning contractual language and closing mechanisms in the purchase agreement | M&A Conference at Fordham Law New York

Aligning contractual language and closing mechanisms in the purchase agreement
By Ms. Jelena Guzenko & Mr. Mohit Singh & Mr. John O'Brien & Ms. Christen Morand

This panel convened to discuss methods for refining the terms of a purchase agreement, drawing on perspective from Jelena Guzenko, Director of M&A and Post-Closing Management at Siemens, John O’Brien, Vice President of Corporate Development at Brooks Automation, and Mohit Singh, Senior Vice President at BP.

Christen Morand, a Partner in EY's Forensic & Integrity Services practice led the discussion and provided guidance on a number of accounting structures including earnouts, lock-boxes, and other sophisticated mechanisms.

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Avoiding transaction disputes through refinements in closing terms | M&A Conference at Wharton San Francisco

By Ms. Sarah Dalton & Mr. Mark Legaspi & Ms. Hiran Thacker & Rachel Masory

The use of refined closing mechanisms and tailored accounting provisions in an acquisition purchase agreement can prevent many of the most common post-close disputes.  However, in some transactions these innovative methods can create a new set of risk.

The participants in this discussion considered both the positive and negative characteristics of working capital adjustments, earnouts, and lockboxes among other mechanisms.

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Earnouts bridge valuation differences, but frequently lead to post-closing disputes

Earnout bridge valuation differences, but frequently lead to post-closing disputes
By Gail Weinstein & Brian T. Mangino & David L. Shaw & Robert C. Schwenkel & Steven Epstein & Maxwell Yim

While often used to bridge valuation differences during the negotiation of an agreement to sell a company, earnouts frequently lead to post-closing disputes. This detailed paper looks at two recent Court of Chancery decisions which highlight pitfalls associated with the period during which earnouts are measured. In Edinburgh Holdings, Inc. v. Education Affiliates, Inc., the court held that the covenant to operate the acquired business “consistent with past practices” during the Earnout Period precluded disposition of the earnout-related dispute at the early pleading stage of litigation.

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