Mergers & Acquisitions
two or more companies combine to form a new entity and neither of the previous companies remain in existence.
What is a merger
Firms that buy and sell businesses often look to structure the deal as this in order to avoid getting stuck with the liabilities of the seller.
What is an asset purchase?
In the case of Gimbel v. Signal Companies, Inc. the Delaware Court of Chancery denied Gimbel's petition, holding that the sale of the oil subsidiary was not _____.
What is "all or substantially all"
Members of the board of directors must act in the best interest of the corporation as opposed to their own.
What is a fiduciary relationship?
The purchase of one company by another company. The acquiring corporation steps into the shoes of the target corporation, while the target company disappears by operation of law.
What is an acquisition?
The first exception, which involves the buyer assuming the liabilities of the seller.
What is an express or implied agreement?
In Paramount v. QVC Network, Inc., the Supreme Court applied the _________ test to the facts of the case and held that the conduct of Paramount's board was not reasonable as to process or result.
what is enhanced scrutiny?
Fiduciary duties are especially relevant when a board is considering whether to approve or reject a proposed _____ or _____
What is a merger or acquisition?
Enables a private company to be publicly listed in a relatively short time frame, privately held company buys a publicly listed shell company (usually one with no business and limited assets)
This exception occurs when ______ has been used to evade liability for debts.
What is a fraudulent transaction?
The doctrine that Ebenezer United Methodist Church claimed that Green and Synvest had violated.
What is the corporate opportunity doctrine?
Aspecial kind of contract that binds the parties to confidentiality and exclusivity obligations during the due diligence phase of a corporate transaction.
What is a letter of intent?
Occurs when the buyer buys the shares, and therefore control, of the target company being purchased.
What is a stock purchase?
This exception applies when the asset buyer is a continuation of the seller. Courts will look for common ownership between the buyer and seller as well as the common identity of officers or directors.
What is the mere continuation exception?
What is the fiscal responsibility of the Board of Directors?
Board members should seek _______ advice before deciding whether or not to approve a proposed merger or acquisition.
What is attorneys, investment bankers, and valuation experts?
Occurs when the buyer purchases some or all of the assets of the target company.
What is an asset purchase?
The exception which applies to a transaction that is essentially a merger or consolidation between the buyer and seller. There are 4 factors to consider in order to determine if this has occurred.
What is a de facto merger?
When a court believes that fairness demands that some or all of the shareholders are personally liable.
What is piercing the veil?
The pre-closing process in which the acquirer reviews the financial state of the target company and identifies potential or actual legal liabilities of the target.
What is due diligence?