NEW: Freshfields discusses non-performance of interim operating covenants as a more likely basis for terminating M&A agreements than Material Adverse Changes / Material Adverse Effects due to consequences of the coronavirus pandemic, and discusses the Delaware Court of Chancery’s decision in Cooper Tire & Rubber Co. v. Apollo (Mauritius) Holdings Pvt., Ltd, et al., C.A. No. 8980-VCG, memo. op. (Del. Ch. Oct. 31, 2014), as instructive on how courts might assess alleged breaches of interim operating covenants in Why parties now need to focus on interim operating covenants.
Law360 discusses force majeure clauses as likely limited alternatives to Material Adverse Change / Material Adverse Effect clauses for parties seeking to be excused from M&A agreements — in which such clauses are comparatively uncommon — or commercial contracts, in Why Force Majeure Isn’t A Golden Ticket Out Of M&A Deals.
Shearman & Sterling discusses grounds upon which contracting parties might seek to avoid performance due to exigencies caused by coronavirus, including force majeure, Material Adverse Change / Material Adverse Effect, impossibility, impracticability, or frustration of purpose, in Analysis Of Non-Performance Of Contractual Obligations In Light Of The Covid-19 Pandemic.
Norton Rose Fulbright discusses various risks to consummation of M&A transactions that may emerge due to the economic effects of coronavirus, including material adverse change, interim period operating covenants, interim period due diligence requirements, changed considerations involving purchase price adjustments, and availability of financing in COVID-19 Impact: Potential Risks and Problems in Signed M&A Deals.