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Importance of Closing Conditions in Mergers

Writer's picture: LawExchange InternationalLawExchange International

Williams Companies, Inc. v Energy Transfer Equity, L.P. – Court of Chancery of the State of Delaware

On June 24, 2016 the Delaware Court of Chancery ruled on a dispute with implications for lawyers and companies negotiating closing conditions in a merger agreement.  The dispute in Williams Companies, Inc. v Energy Transfer Equity, L.P. centered on a legal opinion to be delivered by the purchaser’s tax counsel prior to closing.   The purchasers were able to terminate the merger agreement when their counsel refused to deliver the opinion.  Practitioners negotiating merger agreements will want to pay special attention to the lessons of Williams before agreeing to any closing conditions or committing to use “commercially reasonable” efforts to meet pre-closing obligations.   Click here to read full article.

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