How Does Delaware Do It? Judges Alone Don’t Explain Chancery’s Speed

On July 19, 2022, in the Twitter v. Musk litigation, Chancellor Kathaleen McCormick presided over what was likely the most widely observed hearing on a motion to expedite in the Delaware Court of Chancery’s history. While deal bust-ups are front page fare for the financial press, the high profile of this case brought the Court of Chancery further into the national consciousness than usual (though who among us hasn’t asked “what is a chancery?”). On the day of the hearing, the public access telephone line was, indeed, “lit,” hitting its maximum capacity with merger arbs (and other interested Read more

The Darwinian Dynamics of Contracting

First-year law students typically learn that the terms of a contract represent a snapshot of the parties’ mutual intent, captured at the “magic moment” of contract formation. In reality, however, contractual sausage making is far messier than this idealized account admits. Even sophisticated negotiators can (and do) fall prey to inattention, bad planning, poor information, slothful mimicry, bad negotiating or decision-making skills, and more. And when they do, the contract terms they adopt may diverge from shared intent – sometimes substantially. In short, contracts are often the products of their environments, including political constraints, economic exigencies, and the inherent limitations … Read more

How to Start Rebuilding Supply Chains in the Wake of Covid-19

The Covid-19 outbreak demonstrates how vulnerable our elaborate cross-border supply chains are to disruption. It isn’t the first time in recent memory that contemporary supply chains have been upended – the 2011 earthquake off the coast of eastern Japan is one of many examples. But Covid-19 has taken supply chain disruption to a new level of severity as well as scale. Failure is no longer measured solely in economic terms; rather, the unavailability of key inputs, from reagents to ventilator parts to personal protective equipment, means the difference between life and death.

How do we begin rebuilding our supply chains … Read more

A “Majeure” Update on COVID-19 and MAEs

Beyond the extraordinary human toll it continues to exact, the coronavirus has thrown a pall of uncertainty over hundreds of corporate transactions that were signed and waiting to close at the pandemic’s onset. As we noted in our previous Blue Sky Blog post, an important factor for understanding the fate of these deals is the structure and scope of their force majeure provisions, known in transactional jargon as MAC/MAEs (henceforth ‘MAEs’). Our analysis utilized text analysis tools to evaluate historical data of MAEs in a population of M&A deals spanning more than a decade and a half (January 2003 … Read more

Coronavirus Is Becoming a “Majeure” Headache for Pending Corporate Deals

A folk proverb from the American West teaches that the most important ingredient of a successful rain dance is timing. And the timing couldn’t be worse for signed corporate deals hanging in the balance at the onset of the novel coronavirus pandemic.  As of this week, we estimate that there are just under 150 significant mergers and acquisitions (M&A) transactions signed and waiting to close, representing over half a trillion U.S. dollars in economic value. The fate of these deals has been thrown into considerable doubt by the COVID-19 crisis. And, in an uncanny resemblance to the onset of the Read more

Using the M&A Market to Study Innovation Problems

In an economic environment where technological disruption and regulatory upheaval are the norm, understanding innovation processes is essential to aggregate economic growth and individual companies’ survival.  As a result, how innovations are produced in a wide range of markets has attracted a massive amount of scholarly and popular attention.[1]  Yet, few have focused upon how the legal infrastructure, to use Gillian Hadfield’s term, underlying those innovations develops over time to meet new market needs.  We know more about how our iPhones were developed than how market institutions evolved to make the iPhone possible.

In a new … Read more