This December, the Delaware Supreme Court penned two decisions that shined the spotlight on purchase agreement provisions that are often afterthoughts in negotiations. In Golden Rule Financial Corporation v. Shareholder Representative Services, No. 61, 2021, 2021 WL 5754866 (Del. Dec. 3, 2021) (ORDER), the Court reviewed the post-closing “true up” language and determined that “consistently applied” accounting principles in the post-closing true up does not necessarily mean “in the same manner as had been applied prior to closing.” And in AB Stable VIII LLC v. MAPS Hotels and Resorts One LLC, –A.3d–, 2021 WL 5832875 (Del. Dec. 8, 2021), the Court confirmed what it means to operate a business in the ordinary course between signing and closing during a pandemic. The Golden Rule and AB Stable decisions provide an insightful frame of reference for practitioners to rethink what these provisions mean and how they may want to recraft them to allocate risk as intended.
Continue Reading Delaware Supreme Court Shines Spotlight on Boilerplate Purchase Agreement Provisions
