Pre-closing disputes in M&A Setting the scene Prof. Henry Peter Warsaw, May 2010
2 I. Main phases Phases Signing Pre-signing Pre-closing Time Line Post-signing Post-closing Post-signing and pre-closing Closin g Events
3 II. Chronology (and logics) of the pre-closing phase Buyer’s due diligence (data room)(Audit) Letter of intent Purchase agreement (SPA) Confidentiality/ exclusivity agreement (s) Closing condition(s) (precedent) Time Line Facts Docs./ clauses Bidding process Information memorandum (Vendor’s due diligence) (Binding) offer ClosingSigning Negotiations
4 A.Procedural Applicable law Jurisdiction Valid arbitration clause ? Interim relief: where and what ? Merit: where and what ? Specific performance Pre-signing: order to sign ? Post-signing / pre-closing: order to close ? Order to disclose ? III. Possible disputes
5 B.Merit Letter of intent Binding ? Obligation to negotiate / act in good faith (culpa in contrahendo) ? Obligation to inform ? Type of damages Benefit of the deal (“positive” interest in the performance of the contract) Reliance damages (“negative” interest in the entering into the contract) III. Possible disputes
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