Tue, Sep 22, 2020

Norman Harrison Discusses Material Adverse Effect Provision in Tiffany-LVMH Chancery Fight

Norman Harrison, Managing Director in the Disputes Consulting practice, discusses Tiffany’s lawsuit against LVMH, which alleges that LVMH is unlawfully using COVID-19 to avoid completing their $16.2 billion merger, in a recent Law360 article.

Norman explained that in order for a party to successfully assert there has been a material adverse effect, it must prove there has been a decline in the target company's business that is disproportionate when compared with competitors. Additionally, it has to prove the negative impact on the target's business will be long-lasting.

"Those factors must be proven with great particularity," Norman said. "When a party alleges that due to a recession or COVID or other unanticipated events, that a target company is no longer as valuable to the buyer, the target's loss of revenue, cash flows or market share, if comparable to those experienced by its competitors, may not be enough to establish a material adverse effect."

Read the full article here.

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