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Pandemic-Related Deal Litigation Highlights Buyer Leverage in Transactions Requiring Debt Financing

Cooley M&A

The decisions from the court on those preliminary matters, as well as the arguments raised by legal counsel, offer some valuable lessons for sellers considering sale transactions that require debt financing, and may motivate sellers to re-evaluate certain provisions and remedies that have become customary in those transactions.

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Have Your Cake, and Closing Too: Invoking Prevention Doctrine, Delaware Chancery Court Grants Seller’s Request for Specific Performance in COVID-Related M&A Dispute

Cooley M&A

In reaching this order, the court applied the prevention doctrine, finding that the unavailability of buyer’s debt financing did not permit buyer to circumvent its obligation to close because buyer materially contributed to the debt financing being unavailable. All of those demands were rejected by the lenders.