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Market-Based MAC and Termination Fee Clauses on the Rise, But Subject to Pitfalls
Financial markets are unsettled. A result of the U.S. housing crisis has been a disruption in the general credit markets and increased scrutiny of transactions using higher risk debt financing, including leveraged buyout deals. Much of the disruption in the credit markets became evident during September 2007, and many equity sponsors and financing sources that had issued commitments prior to that time reconsidered their commitments later in the year. In many cases the cost of the financing was significantly more expensive, and in some cases the financing was no longer available. This situation has caused various equity sponsors and financing sources to re-examine their obligations to consummate a distressed commitment and their ability to back out of a deal.
Two types of contract clauses are commonly cited when a buyer or financing source desires not to make good on its commitment. These clauses are material adverse change ('MAC') clauses and termination fee clauses. Several recent cases show that good draftsmanship and a clear understanding of their intended effect are essential in heading off disputes when implementing these provisions.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
How AI Has Affected PR
When we consider how the use of AI affects legal PR and communications, we have to look at it as an industrywide global phenomenon. A recent online conference provided an overview of the latest AI trends in public relations, and specifically, the impact of AI on communications. Here are some of the key points and takeaways from several of the speakers, who provided current best practices, tips, concerns and case studies.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.