Lessons in RTM assignment restrictions

Author: | Published: 19 Oct 2011

A more prudent approach to third party consents may be required when closing reverse triangular mergers (RTM) following an unexpected Delaware Court of Chancery decision earlier this year.

Corporate attorneys say that in RTMs, and even majority stock purchases, it may now be advisable to seek the consent of targets’ third party contractors subject to an anti-assignment clause.

In Meso Scale Diagnostics v. Roche Diagnostics, the court denied Roche’s motion to dismiss on the question of whether a contractual assignment had occurred in...