Mergers & Acquisitions

In the beginning of February 2020, COVID-19 seemed to have little to no impact on venture capital investing in the United States.  Fast forward a few weeks later: concerns quickly spread over the entire industry about the effects of the COVID-19 pandemic on venture investing, its impact on startup companies and the U.S. economy in general.  Emerging growth companies instantly went into “conserve cash mode” and applied for PPP loans.
Continue Reading 2020, 2021 and the EC/VC Industry – Review of the Past Year and Predictions for the Current One

In almost all corporate transactions, the first piece of written documentation the parties exchange and execute (after a non-disclosure agreement) is a letter of intent or term sheet (“LOI”), which is intended to summarize the main deal points. And as many corporate transactions involve entities organized in Delaware, these documents often select Delaware as the governing law.
Continue Reading When Is a Non-Binding Term Sheet or Letter of Intent Enforced as a Binding Contract?

By Matthew Richardson

Beginning this year, according to forms or regulations the IRS prescribes, any issuer of a “specified security” will have to file an information return setting forth:

  1. a description of any organizational action (occurring after December 31, 2010) that affects the basis of the specified security of the issuer;
  2. the quantitative effect on the specified security’s basis resulting from the organizational action; and
  3. any other information IRS may prescribe.

Continue Reading New IRS Reporting Rules for Stock Splits, Mergers and Acquisitions

By Stephen LaSala and Courtney Mathes

On January 14, 2011, the Delaware Chancery Court issued an opinion in In re John Q. Hammons Hotels Shareholder Litigation that a merger transaction in which a controlling stockholder received consideration different than that received by the minority stockholders met the “entire fairness” standard. This opinion followed the Court’s determination in October 2009 that “entire fairness,” was the appropriate standard of review in this case.Continue Reading Delaware Chancery Court Provides Further Clarification as to When the “Entire Fairness” Standard of Review is Appropriate and How It Will Be Applied

By John Stigi and Martin White

In Golden Telecom, Inc. v. Global GT LP, 2010 WL 5387589 (Del. Dec. 29, 2010), the Delaware Supreme Court affirmed a judgment of the Delaware Chancery Court in an appraisal proceeding under Section 262(h) of the Delaware General Corporation Law (“DGCL”). Section 262(h) provides that in the event of a merger, a stockholder of a Delaware corporation is entitled to an independent appraisal proceeding regarding the “fair value” of its outstanding shares. In affirming the Chancery Court, the Supreme Court declined to adopt two bright line rules for appraisal proceedings under Section 262(h). First, it rejected the notion that the Chancery Court must consider the merger price agreed to by the parties following arm’s-length negotiations and fair process as necessarily reflecting the “fair value” of the corporation’s shares. Second, it rejected the assertion that a corporation is bound by company-specific data included in its fairness opinion in arriving at a “fair value” under Section 262(h). This decision confirms that the Chancery Court has great flexibility, and is entitled to great deference, in conducting its independent appraisal of the value of a merger target under Section 262(h).Continue Reading Delaware Supreme Court Holds That Chancery Court Is Not Bound By Merger Price Or Fairness Opinion In Appraisal Proceedings Under Delaware General Corporate Law Section 262(h)