Pre-closing disputes in M&A

Setting the scene

Prof. Henry Peter

Warsaw, 13-14 May 2010

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I. Main phases

Phases

Signing

Pre-signing

Pre-closing

Time Line

Post-signing

Post-closing

Post-signing and pre-closing

Closing Events

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II. Chronology (and logics) of the pre-closing phase

• Buyer’s due diligence (data room) • (Audit)

• Letter of intent

•Purchase agreement

(SPA)

• Confidentiality/ exclusivity agreement (s)

• Closing condition(s) (precedent)

Time Line

Facts

Docs./ clauses

• Bidding process

• Information memorandum

• (Vendor’s due diligence)

• (Binding) offer

• Closing• Signing

• Negotiations

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A. Procedural

Applicable law

Jurisdiction Valid arbitration clause ? Interim relief: where and what ? Merit: where and what ?

Specific performance Pre-signing: order to sign ? Post-signing / pre-closing: order to close ? Order to disclose ?

III. Possible disputes

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B. Merit

Letter of intent Binding ? Obligation to negotiate / act in good faith (culpa in

contrahendo) ? Obligation to inform ?

Type of damages Benefit of the deal (“positive” interest in the performance of

the contract) Reliance damages (“negative” interest in the entering into

the contract)

III. Possible disputes

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