Delaware’s Akorn decision: materiality more complicated than that

Author: IFLR Correspondent | Published: 26 Feb 2019

The recent case has brought the question of materiality in acquisition agreements to light again, but it’s not the game-changer many think it is, writes Goodwin Procter’s David Bernstein

Almost every agreement for the acquisition of a company has a provision saying that if anything happens between the time the agreement is signed and the time the acquisition is completed that has a material adverse effect on the target company, the acquirer can elect not to carry out the transaction. However, until October 2018, there never had been an adverse situation that the Delaware courts found to have been sufficiently material to entitle someone who had agreed to acquire a company not to complete the transaction....