1. Closing Disputes and Mac Clause Defense
M&A litigation over closing disputes turns on the purchase agreement's specific language and each party's ability to marshal facts supporting their interpretation.
How Can a Seller Force a Reluctant Buyer to Close the Deal?
A seller whose buyer attempts to abandon the deal after signing can seek specific performance, a remedy that compels the buyer to actually complete the acquisition rather than simply paying a breakup fee, and Delaware courts have increasingly granted specific performance in M&A disputes where the purchase agreement explicitly provides for that remedy and the seller can demonstrate it has no adequate remedy at law, and mergers and acquisitions counsel must move immediately for a preliminary injunction before the buyer takes any irreversible step.
How Are Material Adverse Change Claims Evaluated and Defeated?
A buyer asserting that a material adverse change gives it the right to terminate must demonstrate that the change substantially threatened the target's overall earnings power in a durationally significant manner, and Delaware courts have consistently declined to find a material adverse change based on temporary financial setbacks, industry-wide downturns, or conditions that were publicly known before signing. Corporate litigation counsel must compile evidence that the deterioration is cyclical, industry-wide, and already priced into the deal.
2. Fiduciary Duty Defense and Shareholder Litigation
M&A litigation challenging a board's decision to approve a sale places the directors' conduct under judicial scrutiny, and the outcome depends on whether the court applies the deferential business judgment standard or demands enhanced scrutiny.
How Should Directors Defend against Fiduciary Duty Claims in M&A?
The business judgment rule protects directors who acted on an informed basis, in good faith, and in the honest belief that the transaction served the corporation's best interests, and a board that engaged a financial advisor, received a fairness opinion, held multiple deliberative meetings, and documented its analysis throughout the process is well-positioned to invoke that protection, and a corporate governance advisory record of the board's deliberation process gives that defense substantial additional weight.
Why Do Shareholder Class Actions Challenging Deal Prices Often Fail?
Shareholder class actions challenging the fairness of an M&A transaction face significant procedural and substantive hurdles, including the requirement to plead with particularity facts sufficient to rebut the business judgment presumption, and post-closing damages claims require demonstrating through the shareholder derivative lawsuit record that a better process would have produced a materially higher price rather than simply a different one.
3. Post-Closing Indemnification and Fraud Claims
M&A litigation arising after closing centers on what the seller knew at signing, which representations proved false, and who bears the financial consequences of the gap between what was promised and what was delivered.
How Are Post-Closing Indemnification Claims Structured and Pursued?
A buyer who discovers that the seller's representations about financial performance, regulatory compliance, or litigation exposure were inaccurate can seek indemnification under the purchase agreement, but the claim must be brought within the survival period, the loss must exceed any applicable basket, and total recovery is typically capped at a negotiated percentage of the purchase price. Indemnification claims must be identified and filed before the survival period closes.
How Is Seller Fraud Proven in a Post-Closing M&A Dispute?
A fraud claim arising from an M&A transaction requires proving that the seller made a false representation of fact, knew it was false at the time of signing, intended for the buyer to rely on it, and that the buyer did rely on it to its detriment. A successful fraud claim can circumvent the limitations a seller negotiated, but proving it typically requires a forensic accounting investigation of the data room to establish when management knew the true picture diverged from the disclosed financials.
4. Appraisal Rights and Earn-Out Disputes
M&A litigation over valuation takes two distinct forms: dissenting shareholders demanding a judicial fair value determination, and sellers alleging the buyer manipulated post-closing results to avoid earn-out payments.
How Are Appraisal Proceedings Managed to Minimize Financial Exposure?
A corporation facing an appraisal proceeding must prepare a competing valuation using methodologies the Delaware Court of Chancery has accepted in prior proceedings, while simultaneously challenging the petitioners' expert, and securities litigation experience in appraisal proceedings is valuable because the court's fair value determination is driven almost entirely by those competing expert analyses.
When Does an Earn-Out Dispute Become a Breach of Contract Claim?
An earn-out dispute becomes a breach of contract claim when the seller can demonstrate that the buyer took affirmative steps to suppress the revenue or EBITDA metrics that determine whether the milestone was reached, rather than simply operating the business in a way that fell short, and commercial litigation counsel must trace those deliberate choices through post-closing accounting decisions, intercompany pricing, and board minutes.
07 Apr, 2026
