Lies, Damn Lies And M&A Fraud

In <i>ABRY Partners V, L.P. v. F&amp;W Acquisition LLC, et al.</i>, Vice Chancellor Strine of the Delaware Court of Chancery addressed the circumstances in which a seller may contractually insulate itself in a purchase agreement from claims by the buyer for rescission and post-closing damages due to intentional misrepresentations concerning the business or assets being sold. The court held that 'when a seller intentionally misrepresents a fact embodied in a contract ' that is, when a seller lies,' Delaware public policy compels Delaware courts to disregard provisions of a contract that purport to eliminate certain remedies, including the remedy of rescission. <br/>This article examines Vice Chancellor Strine's decision in ABRY and highlights some of its implications for buyers and sellers in M&amp;A transactions.

20 minute read July 27, 2006 at 12:23 AM

By

Todd E. Lenson And David I. Schultz