Craig A. Newman, Patricia C. OPrey, Publications
Memorandum: Delaware Chancery Court Limits Liability to Break Up Fee in Merger Termination
January 8, 2008
Below is a brief client update written by our partners Craig Newman and Patricia O'Prey regarding a recent decision relating to the termination of a merger agreement and the resulting monetary liability. In United Rentals, Inc. v. RAM Holdings, Inc. and RAM Acquisition Corp., Case. No. 3360-CC (Del. Ch. Ct. Dec. 21, 2007), the court refused to grant specific performance when the acquiring party walked away from the deal.
Instead, relying exclusively on remedy provisions in the merger agreement, the court concluded that the acquiring party's liability was capped at the $100 million “Termination Fee" contemplated by the parties' agreement.
