What does a pit beef sandwich have to do with the rising litigation trend involving M&A deals? Delaware Supreme Court Chief Justice Leo Strine makes the connection in a new paper that gives some solid advice for legal and financial advisors in M&A transactions.
Today, it’s almost a certainty that an M&A deal will trigger a lawsuit by shareholders. Recent lawsuits (most notably the Rural Metro case, available at BVLaw) stress that reliable valuations and fairness opinions are critical in today's M&A deals. Boards of directors, bankers, and their advisors are all under intense scrutiny for potential conflicts of interest and the integrity of the financial analysis underlying the deal.
Listen up: Chief Justice Strine’s paper addresses what legal and financial advisors can do to conduct an M&A process in a manner that: (a) promotes making better decisions; (b) reduces conflicts of interests and addresses those that exist more effectively; (c) accurately records what happened so that advisors and their clients will be able to recount events in approximately the same way; and (d) as a result, reduces the “target zone” for plaintiffs’ lawyers.
For example, he says independent directors should examine red-lined versions of the financial adviser's PowerPoint presentations to be aware of changes that are often overlooked. However, he says he is told that the U.S. does not have the technological capacity to produce a legible PowerPoint redline version. “Count me as patriotic,” he writes. “If this is the only hurdle, I believe our nation is capable of vaulting it. Only someone who does not like hot dogs, hamburgers, cheesesteaks, lobster rolls, clam chowder, shrimp and grits, jambalaya, pit beef sandwiches, brisket, barbecue ribs, Good Humor ice cream bars, spaghetti and meatballs, fish tacos, Kentucky Fried Chicken, or things fried at state fairs could question our nation’s ability to do this; in other words, only someone who despises America itself.”
BVWire applauds Chief Justice Strine for his sage advice—and his selection of food items. To download his paper, click here.