The MBBP M&A team has extensive experience guiding clients through the complexities of M&A transactions in diverse markets. Over the last decade, we have represented hundreds of publicly-traded and privately-held companies in transactions, both buyers and sellers, valued from several million dollars up to hundreds of millions of dollars.
In 2016, MBBP completed a variety of M&A transactions in diverse fields such as the manufacture of window coverings and the delivery of real world Radio Frequency performance test solutions, and encompassing industries as varied as the streaming of panoramic and 360-degree video and the distribution of building products.
Read more about our 2016 M&A deals. Cheers to a successful year for our clients!
Back by popular demand, corporate partner Mary Beth Kerrigan was a panelist at an encore panel of this year’s ABA Business Law Annual Meeting in Boston. Mary Beth discussed complex issues that arise in acquisitions of venture-backed companies.
The webinar included varying topics, including disproportionate allocation of indemnity risk among stockholders/stakeholders, complex waterfalls, and much more. Congratulations to Mary Beth on another job well done!
To learn more about the conference, visit the ABA’s event page.
In an article published in ALM’s Corporate Counsel, corporate partner Shannon Zollo commented on Facebook’s M&A due diligence ahead of its approximately $2 billion acquisition of virtual reality developer Oculus VR. Video game creator ZeniMax Media Inc. sued Oculus, and Facebook once it purchased Oculus, on several allegations, including copyright infringement. In the trial, Facebook’s CEO Mark Zuckerberg was questioned about whether the one weekend his company was given to perform due diligence was enough time.
Shannon notes that “as a general rule, due diligence under normal conditions can take at least a few weeks, if not a few months”, and that proper due diligence could be difficult to conduct under such a short time frame, especially when intellectual property is a key component of the deal. Jury deliberations have begun in the trial.
For further detail on the case and on Shannon’s comments on due diligence, read the full article.
MBBP Corporate Partner Scott Bleier will participate in two separate sessions during this year’s ABA Business Law Annual Meeting in Boston. Scott will be discussing the recent Sun Capital Partners III v. New England Teamsters & Trucking Industry Pension Fund (D. Mass. March 28, 2016) court case at the Private Equity and Venture Capital Jurisprudence meeting on Friday, September 9th. Additionally, later that day he will be leading a presentation of the Venture Capital Transactional Documents and Issues Subcommittee regarding various alternative approaches to financing start-up companies, including SAFEs and KISSs.
This year’s meeting includes panels with diverse subject matters, as well as numerous networking opportunities. In addition to Scott’s role, Corporate Partners Mary Beth Kerrigan and Jon Gworek will also take part in the conference. Mary Beth will be a panelist on the panel “Venture-Backed M&A: Special Considerations“, while Jon Gworek will conclude his tenure as Chair of the Private Equity and Venture Capital Committee.
To learn more about the conference, view the ABA’s event page.
Ruling that the value of certain supplemental transaction disclosures in the context of a $15 billion merger was “nil,” the Seventh Circuit Court of Appeals recently overturned an award of attorneys’ fees to plaintiffs’ counsel in the context of merger litigation. On August 10, 2016, in the case In Re: Walgreen Co. Stockholder Litigation, case number 15-3799, writing for the 7th Circuit, Judge Posner, following a recent trend of decisions denying requests for attorneys’ fees to attorneys representing shareholders challenging a merger, adopted Delaware’s Trulia standard for approval of such settlements.
The case In re Trulia, Inc. Stockholder Litigation, 129 A.3d 884 (Del. Ch. 2016) decided by the Delaware Chancery Court held in part that “[t]o be more specific, practitioners should expect that disclosure settlements are likely to be met with continued disfavor in the future unless the supplemental disclosures address a plainly material misrepresentation or omission….”
In Walgreen, the plaintiffs’ counsel successfully forced the defendant company to furnish supplemental disclosures regarding the proposed transaction. The Court in analyzing the supplemental disclosures in the context of the transaction and information that had been previously disclosed to the stockholders determined that the additional disclosures were largely worthless. As a result, the 7th Circuit held that the additional disclosures did not meet the clearer standard that the disclosures be “plainly material” and the Court held that the settlement award to plaintiffs’ counsel should be rejected by the lower court.
Based on the recent trend of courts to reject payment of fee only settlements in the context of merger litigation, evidence suggests that the filing of so called “strike suits” has begun to decrease.
For more information please contact Joe Marrow.
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Massachusetts Wage and Hour Laws: Legal Risks for Businesses in Transition – Scott J. Connolly
The laws governing payment of wages, overtime pay, and commissions have become a leading source of employee claims and employer liability. Mistakes in this area can be costly and penalties in Massachusetts include treble damages and individual liability against certain individual corporate officers. Buyers and sellers in corporate transactions must pay close attention to these risks where the transaction may result in termination of employees’ employment.
Read more about wage and hour laws legal risks.
SEC to Funds: Watch the Broker-Dealer Activities – Mark J. Tarallo
On June 1, 2016, the United States Securities and Exchange Commission (the “SEC”) announced and issued an enforcement action (the “Enforcement Action”) against Blackstreet Capital Management, LLC (“BCM”), and its founder, Murry Gunty (“Gunty”). The Enforcement Action arose out of actions taken by funds advised by Blackstreet that the SEC alleges required registration by Blackstreet as a broker-dealer
Read more about unregistered broker-dealer activity.
Importance of Closing Conditions in Mergers – Williams Companies, Inc. v Energy Transfer Equity, L.P. – Court of Chancery of the State of Delaware – Matthew R. Loecker
On June 24, 2016 the Delaware Court of Chancery ruled on a dispute with implications for lawyers and companies negotiating closing conditions in a merger agreement. The dispute in Williams Companies, Inc. v Energy Transfer Equity, L.P. centered on a legal opinion to be delivered by the purchaser’s tax counsel prior to closing. The purchasers were able to terminate the merger agreement when their counsel refused to deliver the opinion. Practitioners negotiating merger agreements will want to pay special attention to the lessons of Williams before agreeing to any closing conditions or committing to use “commercially reasonable” efforts to meet pre-closing obligations.
Read more about M&A closing conditions.
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By: Carl F. Barnes
The Federal Trade Commission announced recently that the maximum civil penalty for violations of the premerger notification requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 have increased from $16,000 to $40,000 per day. The increase was effective this past Monday, August 1, 2016, but will also apply to violations occurring prior to that date. The full text of the revised rules was published in the Federal Register on June 30.
The FTC last increased the maximum civil penalty in 2009, from $11,000 per day to $16,000 per day. The present increase is the result of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, which directs federal agencies to implement a “catch-up” inflation adjustment based on a prescribed formula. Starting in January 2017, the FTC will increase its maximum civil penalties annually, just as it adjusts HSR filing thresholds.
A premerger notification gives the FTC and the Department of Justice, which share jurisdiction over HSR, the ability to review a transaction for anti-competitive effects and determine whether to seek injunctive or other relief before it closes. Recent enforcement actions are good reminders of a few fundamental facts:
- Every day of noncompliance with HSR is a separate violation, so fines can mount extraordinarily quickly.
- “Premerger,” though that’s the word used in the title of the Act, is really a misnomer: HSR obviously applies to mergers and acquisitions of entire companies (if the filing thresholds are met), but it also applies to some transfers of assets (including patents and real estate), to some minority investments, and to certain licenses, leases and other transactions that don’t look like mergers at all.
- Finally, the Act and the rules implementing it are highly technical and complex. Although the FTC has a long-standing practice of being lenient on first-time, inadvertent offenders, everyone involved in the purchase, sale or other transfers of business assets or equity interests should pay careful attention to the potential application of HSR and consult with skilled counsel. Now more than ever.
For more information, please contact Carl F. Barnes.
For the third time in four years, MBBP Attorney Carl Barnes will be a panelist on MCLE’s Representations, Warranties, Indemnification and Termination Provisions: Drafting and negotiating to allocate risk in business transactions program. Carl will discuss drafting and negotiating key provisions of M&A agreements, with a focus on drafting considerations arising out of recent Delaware case law.
This year’s program will take place from 2:00 to 5:00 p.m. on June 27th at the MCLE Conference Center in Boston, MA. The conference will also be available by both live and recorded webcast. To attend the program or to participate in the live webcast, register here.
MBBP Attorney Carl Barnes will be a panelist in the webinar “When and Why Should a Board Require an Independent Fairness Opinion,” presented as part of the BDO KNOWLEDGE Webinar Series program. The discussion will focus on what fairness opinions are, what they are not, valuation techniques, and the role fairness opinions play in helping directors to fulfill their fiduciary duties in M&A and other transactions.
This moderated panel will be held from noon to 1:00pm, Boston time, on May 5. To register, please visit BDO’s event registration page.
Attorney Shannon Zollo will be a panelist at the upcoming Alliance of Merger & Acquisition Advisors New England Chapter meeting on Monday, May 9th from 4-7pm. The AMAA is the premiere international organization serving the needs of middle market M&A professionals worldwide through educational and transactional support. The New England Chapter serves as a more local resource for face to face connections, education, and professional opportunities.
This upcoming meeting is on the topic of “Bridging the Valuation Gap – Earn Outs”. Specifically, the panelists will discuss the use of earn outs in M&A, structural considerations, measurement methods, legal issues, tax implications, valuation and financial reporting, and potential pitfalls.
To learn more and to register, check out the AMAA New England Chapter Event page.