Elon Musk has lobbed in two additional termination letters since his original July 8 letter seeking to terminate his agreement to acquire Twitter for $44 billion. Each termination letter cites alleged false representations and blown covenants by Twitter in the merger agreement, purportedly justifying termination. Twitter’s response to each letter has been the equivalent of
conditions to closing
May Elon Musk Terminate his Merger Agreement with Twitter over Spambots?
By Alon Y. Kapen on
Another week, another chapter in the Elon Musk-Twitter saga. Last month, Musk posted tweets questioning longtime Twitter claims that automated “spambots” make up fewer than 5% of monetizable daily active users. But on June 6, Musk upped the ante by having his lawyers at Skadden send a demand letter to Twitter reiterating his demand for…
Course Correction: Why “Ordinary Course” Covenants in Acquisition Agreements Should be Drafted Carefully
By Alon Y. Kapen on
Posted in acquisitions, conditions to closing, covenants, COVID-19, Delaware, mergers & acquisitions
Should a buyer be allowed to walk away from an acquisition if an extraordinary event occurs between signing and closing that forces the target company to take emergency remedial measures outside its ordinary course, even if consistent with industry practice under the circumstances? This became a pressing issue during the early months of the COVID-19…