Debevoise Discusses Delaware Chancery Ruling on a Material Adverse Event

On October 1, the Delaware Court of Chancery, in a record-breaking 246-page opinion, held that Fresenius Kabi AG (a German publicly listed healthcare company) did not have to consummate its proposed acquisition of Akorn, Inc. (a Nasdaq-listed generic pharmaceutical company) on the basis that Akorn had suffered a Material Adverse Effect, or MAE. The court also found that Akorn had breached certain representations in the parties’ merger agreement, and that the breach would reasonably be expected to result in an MAE. The decision represents the first time in memory that a Delaware court has allowed a buyer to walk away … Read more