Inside M&A – Winter Issue

By on February 20, 2014

McDermott recently released the Winter 2014 issue of Inside M&A, which focuses on current issues surrounding mergers and acquisitions.  Articles in this issue include:

Delaware Court of Chancery Upholds Forum Selection Bylaws
During the last several years, shareholders have challenged nearly every merger and acquisition (M&A) transaction that targeted a U.S. public company where the value of the transaction was greater than $100 million and the offer price was at least $5 per share.  As a result of this litigation explosion, many corporations have adopted forum selection bylaws that require such challenges to be brought in the target company’s state of incorporation.  Chancellor Leo E. Strine Jr.’s decision in Boilermakers Local 154 Retirement Fund v. Chevron Corp. to uphold such bylaws is an important step toward reducing the burden and expense of litigation over M&A deals.
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Crying Revlon: Delaware Courts Dismiss Claims in Morton’s Restaurant Group Acquisition
In In Re Morton’s Restaurant Group, Inc. Shareholders Litigation, Chancellor Leo E. Strine Jr. dismissed all claims in an action arising out of the acquisition of Morton’s Group, Inc.  This case is another example of attempted misuse of the so-called Revlon “entire fairness” test by plaintiffs.  It also demonstrates that a board engaged in a sale process can protect itself and the transaction by conducting an extensive market check and by sharing the proceeds of the sale ratably amongst all stockholders.
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Managing Risk—Captive Insurance Companies
Soaring insurance costs combined with sound risk management policies often lead risk managers to consider a strategy that includes self-insurance, often taking the form of a captive insurance company.  Properly constructed and maintained, a captive insurance company can produce both business and tax benefits.
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