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Gavel Down: Must-know Legal Cases that Reshape the M&A Landscape

ROGER’S CORNER

Get ready to listen! We’re launching a podcast episode on the 2024 Distressed Investing Panel Summit Panel Session 1 on Bankruptcies and Restructuring. Follow us on M&A Advisor Podcast on Spotify and Apple Podcast for the latest uploads. Links below:

Spotify- https://open.spotify.com/show/77ieA1Ju5AKNJAVBNb5ulJ?si=JjT-i8NQTcKo3TnHAJ-cnQ

Apple Podcasts- https://podcasts.apple.com/ph/podcast/m-a-advisor-podcast/id1735703781

On March 19, 2024, The M&A Advisor hosted the 2024 Distressed Investing Summit in Palm Beach, Florida. An esteemed panel of thought leaders, led by Ceasar Anquillare CEO at Winchester Capital and Winstar, started the conference with a discussion on bankruptcies and restructuring. The first Summit panel was comprised of: Aura Reinhard, Partner at Joelle Frank, Matthew Karmel, CEO at Structurlam, J. Gregory Milmoe, Shareholder at Greenberg Traurig, Peter S. Kaufman, President at Gordian Group, Louis Chiapetta, Partner at Mayer Brown.

The highlight of the panel discussion was about interesting legal cases that may drastically impact the landscape of mergers and acquisitions moving forward. The Panel specifically discussed three (3) notable legal cases, namely: game giant Activision Blizzard, the West Florida Firefighters Association, and Purdue Pharma.

Let’s delve into each of these cases and explore the insights they provide into the intricate world of mergers and acquisitions.

1. The Activision Blizzard Shareholder Lawsuit

The legal case of game giant Activision Blizzard sheds light on the complexities of corporate governance and merger agreements. It was adjudicated in Delaware Chancery Court. The dispute arose post-merger, with a shareholder contesting the validity of the merger claiming the board of directors didn’t follow proper procedures when approving the merger agreement with Microsoft. The Petitioner challenged the way the board of directors approved an incomplete draft merger agreement (Section 251(b)) and informed stockholders about the merger vote (Section 251(c)). The court’s scrutiny of this case revealed technical discrepancies, leading to questions about the merger’s validity. Meticulous attention to detail in corporate transactions is underscored by this case, which also highlights the potential risks associated with incomplete or ambiguous documentation.

2. West Florida Firefighters Association: Examining Shareholder Agreements

In another Delaware Chancery Court case of West Palm Beach Firefighters’ Pension Fund v. Moelis & Company, the focus shifted to shareholder agreements and their impact on corporate governance. A shareholder of the Moelis & Company challenged the validity of certain provisions of the agreement between the Shareholders and its CEO, Ken Moelis.  The agreement gave Moelis extensive pre-approval rights over the Company’s board of directors’ decision-making.

The court scrutinized the shareholder agreement and found that several provisions such as the Pre-Approval Requirements, three of the Board Composition Provisions, and the Committee Composition Provision effectively transferred the management of the corporation to Moelis, contrary to Section 141(a). This case raises critical questions about the balance between shareholder rights and corporate governance, emphasizing the need for clarity and transparency in shareholder agreements to prevent conflicts and ensure effective decision-making processes.

3. Purdue Pharma: Unraveling Mass Torts and Bankruptcy Proceedings

The Purdue Pharma case, currently pending in the Supreme Court, is at the intersection of mass torts and bankruptcy law. It revolves around the contentious issue of third-party releases in bankruptcy settlements, particularly in the context of the opioid crisis. The issue, in the case, is whether U.S. bankruptcy law allows Purdue’s restructuring to include legal protections for the members of the Sackler family, who have not filed for personal bankruptcy. The proposed settlement, involving Purdue Pharma and the Sackler family, aims to provide compensation to victims while shielding the Sacklers from future litigation. However, the legality of such releases is under scrutiny, with implications for victims’ rights and the broader bankruptcy framework. This case underscores the complexities of mass tort litigation and the challenges of achieving equitable resolutions in bankruptcy proceedings.

Implications and Future Considerations

In conclusion, the Activision Blizzard, West Palm Beach Firefighters’ Pension Fund v. Moelis & Company, and Purdue Pharma cases provide valuable insights into corporate law, governance, and bankruptcy proceedings. These cases highlight the importance of clear communication, transparency, and following legal standards in business dealings and settlements.

As these cases continue to unfold and legal debates ensue, it remains imperative for stakeholders, legal professionals, and policymakers to continue navigating the intricacies of law and upholding principles of justice and fairness. Finally, as these cases proceed through the judicial process, their outcomes will shape legal precedents and inform future debates on bankruptcies, restructuring, mergers, and acquisitions.


Do you want to meet Ceasar Anquillare and our Summit Panel 1 Thought Leaders in person? Join our next event- the 2024 Leadership in Dealmaking Summit, featuring the 15th Annual International M&A Awards and the 15th Annual Emerging Leaders Awards in New York, NY on September 23 and 24, 2024. Gear up for this, folks!

Intrigued by the minds behind Summit Panel 1? Save a seat and schedule a meeting with Ceasar and these thought leaders today!

If you would like to register, please visit our website at www.maadvisor.com.  Or, if you would like to know more about registrations and tickets to this event or all our other events, please email us at events@maadvisor.com or call +1 (212) 951-1550.

Curious about the M&A Advisor Podcast? With the M&A Advisor podcast, coupled with active participation in The M&A Advisor’s EVENTS throughout the year, subscribers will gain information, expand their business network, learn, and be inspired by only the BEST in the industry to achieve personal success. Remember, knowledge is power! Don’t leave success to chance. Take that small step NOW.

Get ready to listen! We’re launching a podcast episode on the 2024 Distressed Investing Panel Summit Panel Session 1 on Bankruptcies and Restructuring. Follow us on M&A Advisor Podcast on Spotify and Apple Podcast for the latest uploads. Links below:

Spotify- https://open.spotify.com/show/77ieA1Ju5AKNJAVBNb5ulJ?si=JjT-i8NQTcKo3TnHAJ-cnQ

Apple Podcasts- https://podcasts.apple.com/ph/podcast/m-a-advisor-podcast/id1735703781

Want to explore these legal cases further?

Activision Blizzard, Inc.

West Florida Firefighters Association

Purdue Pharma

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