negotiators have been seeking steep breakup fees
when engaging in M&A activity with Chinese firms due to the difficulty of closing deals in Chinas increasingly strict regulatory climate.
In the document, an agreement and plan of merger, the company also talks about breakup fees
each company might have to pay if the deal falls apart.
Complications have arisen regarding the number of Orange shares and votes Bouygues will receive from the deal, in addition to how potential breakup fees
will be distributed.
Vapor Corp further noted there were currently no disputes or disagreements between the companies, nor will there be any breakup fees
or reimbursement of costs payable by the parties.
Companies also should consider increased scrutiny while negotiating breakup fees
The contract gave Triad the right to continue seeking a higher price for 40 days and to pay the private groups up to $40 million in breakup fees
Although Bankruptcy Courts regularly approve breakup fees
in asset purchase agreements, there is somewhat less support for these provisions than one would find in public merger agreements.
Marsh explained that in the original offer by WellPoint, which was accepted by Cerulean, breakup fees
of $10 million are required to be paid by either party upon the cancellation of the merger.
In practice, a buyer and its counsel should be aware of the identity of the particular bankruptcy judge involved, and his or her "track record" on the consideration of breakup fees
and overbid rights.
Observation: As with breakup fees
, the bankruptcy court has given another taxpayer-friendly decision.
The merger agreements provide for breakup fees
if the acquisitions are terminated under certain circumstances.
The sides hammered out a last-minute deal in March that had Eastern Outfitters agree to run a private sale with SportsDirect instead that reduced the risk of breakup fees
upsetting the bankruptcy estate's wind down and left avoidance actions intact.