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Delaware Declares That Deliberate Fraud Is Indeed Something Completely Different Than Reckless Fraud

Glenn D. West — Tue, 16 Mar 2021 14:03:37 +0000

By now we should all be well-schooled in the various types and sources of fraud claims, as well as the dangers of undefined fraud carve-outs to the sell-side in an M&A transaction governed by Delaware law. But a recent decision by the Delaware Supreme Court, Express Scripts, Inc. v. Bracket Holdings Corp., 2021 WL 752744 […]

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The Limits of Liability Limitation Provisions: Nonrecourse Clause, Like Exclusive Remedies Provision, May Be Subject to Delaware Public Policy Exception

Glenn D. West — Mon, 25 Jan 2021 16:36:35 +0000

There are few things more fundamental to the sell-side private equity deal practice than, to the maximum extent possible, (1) establishing a contractual cap on post-closing liability for breaches of reps and warranties made by the target company or the selling stockholders and (2) contractually exonerating/releasing the selling entity’s human agents and nonparty affiliates from […]

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Private Equity Sellers Must View “Fraud Carve-outs” with a Gimlet-Eye

Glenn D. West — Wed, 16 Mar 2016 13:00:29 +0000

In a March 3, 2016 post to Weil’s Private Equity Insights blog, it was suggested that the means of eliminating the specter of extra-contractual fraud claims is similar to the purported means of neutralizing a fictional zombie; both require a specialized weapon, skillfully wielded to deliver a decisive blow to exactly the right spot. If […]

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Exclusive Remedy Provisions, Fraud Carve-outs, and Personal Liability for Sell-Side Private Equity Professionals

Glenn D. West — Tue, 01 Dec 2015 22:32:46 +0000

A recent Delaware Court of Chancery decision involving the sale of a business by one private equity firm to another, Prairie Capital III, LP v. Double E Holding Corp., provides another opportunity to remind private equity sellers of the potential for dissatisfied buyers to use fraud claims (even if unfounded) to attempt to gut the […]

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R&W Insurance, Part II: Pros and Cons for Sellers

Private Equity Alert — Thu, 28 May 2015 15:15:59 +0000

The key advantage of R&W insurance to sellers is limiting (or eliminating) their post-closing liability for breaches of reps and warranties made in the acquisition agreement.

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