Huntsman v Hexion illustrates how difficult it will be for private equity firms to withdraw from mergers without paying the leaving price.
The decision denies Hexion Specialty Chemicals’ argument that a material adverse effect (MAE) allowed it to withdraw. Had Hexion won, it would have been able to pull out of the merger without paying a $325 million liability fee.
Contract negotiations came to the forefront of the Delaware Chancery Court decision.
“It really emphasizes a...