US.Recht / M&A: Material Adverse Clause

Im folgenden geben wir einen englischsprachigen Überblick über die U.S.Rechtsprechung zum Thema Material Adverse Clause, die sich zunehmend als vermeintliche "Hintertüre" zum sanktionslosen Ausstieg aus bereits geschlossenen Verkaufsverträgen findet. Wir geben Hinweise zur Abfassung der Klausel. Die anglosächsische Vertragskultur dominiert zunehmend Verträge auch aus dem deutschen Unternehmensrecht und -praxis. Die U.S.Rechtsprechung sollte daher bei der Abfassung solcher Klauseln im Auge behalten werden, da auch bei vereinbartem deutschen Gerichtsstand nicht auszuschließen ist, dass derartige Klauseln von deutschen Gerichten auch mit Hilfe bereits erprobter Auslegungsgrundsätze der U.S.Rechtsprechung interpretiert werden.

Material Adverse Clauses (so called MAC) are increasingly found in merger agreements. Thus, a party invoking a MAC) should know about the respective recent U.S. court reasonings that might find its way into future respective German court proceedings when being invoked as an exit strategy out of already signed purchase or merger agreements. (which predominantly follow anglosaxon contract structures). The U.S.court reasoned that since merger agreements are heavily negotiated and cover many specific risks explicitly, a party invoking a MAC) should expect to encounter the difficult task of overcoming a strong public policy in favor of closing a merger agreement.

Because of this, when a MAC provision is broadly written, like many are, it should only be considered a "backstop protecting the acquiror from the occurrence of unknown events that substantially threaten the overall earnings potential of the target in a durationally significant manner". Shortterm performance swings and known accounting improprieties normally do not fall into this category.
The U.S.court also noted that a contrary rule would encourange the negotiation of extremely detailed MAC provisioins with many carve-outs and qualifiers. Therefore, by interpreting broad clauses as addressing fundamental events that would materially affect the value of a target to a "reasonable acquiror" eliminates the need for drafting such extremely detailed MAC provisions. The U.S.court stated that a policy decision emphasizing a short-term approach would lead to merger agreements more difficult to negotiate and lead to MAC clauses that are overly complex.

Merger agreements, by their nature, are heavily negotiated documents, and public policy is in favor of making sure the parties honorar the spirit of such agreements. Therefore, any party wishing to terminate a deal on the basis of the broad language of a MAC clause must be able to demonstrate that the "adverse change" is of such a quality and magnitrude to overcome a strong presumption in favor of closing the transaction. That will be particularly difficult if the court suspects that the true reason for the termination is buyer's remorse.
The following provides some helpful advice to consider when drafting MAC clauses in purchase or merger agreements. Ideally, an effectively drafted purchase or merger agreement will reflect the factual circumstances of each party at the time of the agreement and a broadly written MAC clause will provide "backstop" protection for events outside the scope of reasonable consideration by either party. Such drafting is less likely to be litigated, thereby allowing the parties, not the courts, to decide the meaning of their agreement. Practically, however, this needs to be considered in light of the perspective of the parties drafting the MAC clause.

The "buyer" should specifically address risks of which the buyer is aware. Ratios, performance benchmarks and other financial tests (objective criteria) are common methods used to be determine thresholds for such specifically identified risiks. Care should be taken, however, to not be "overly" specific (as courts could find that such a high level of specificity rules out other risks not otherwise specified).

The buyer should also include potential adverse events not within the sellers' control. Courts often find the following events to fall outside the scope of a MAC (unless specifically included):

. events from the announcements of consummation of the transaction;
. business turndowns (generally or industry wide);
. enactment of legislation;
. cancellation of a significant contract; and
. future prospects of the seller.

Therefore, if the buyer wishes such events to trigger the MAC clause, they should be specifically included. After the buyer includes those risks that can be reasonably identified, the most comprehensive, general language should be included to cover unknown risks (both within and outside the seller's control). Courts are not likely to allow a buyer to back out of a transaction due to buyer's remorse. If a buyer is concerned about something specific, it should include that concern in the agreement. The broad language of a general MAC clause should only be triggered by a "durationally significant" event.

The "seller" should attempt to limit all of the specific carve-outs proposed by the buyer - especially those over which it has no control (that is, general or industry economic conditions and adverse effects resulting from the performance of the purchase agreement). The seller should seek to eliminate the remaining specific carve-outs, such as financial benchmarks (over which it does have control), or at least negotiate the benchmarks so that the risks of such benchmarks triggering a MAC are low.

The seller will likely encounter heavy resistance to eliminate (or limit) these financial benchmarks. The seller might also propose specific carve-outs that do not trigger a MAC. Finally, the seller should attempt to limit the scope of the MAC clause by a qualification requiring "knowledge" of material adverse events. oth the buyer and seller should consider whether disputes relating to the MAC clause (or the purchase/merger agreement generally) should be resolved by the courts or through binding arbitration. This decision is often driven by the specific facts of the transaction (such as, the court of competent jurisdiction, the arbitrator, etc.). Dispute resolution concerns are beyond the scope of this article because of the highly factual nature of such considerations, but are nonetheless important. The objectives of the buyer and seller in drafting MAC clause language are typically at odds - as with most other elements of the negotiation process. The resulting agreements is usually a combination of negotiating and drafting skill as well as who has the most leverage (that is, the party more willing to walk away from the deal).

Aus Verkäufersicht müssen wir Sie im übrigen vor Akzeptanz solcher Klauseln warnen.