There was an interesting article in The Wall Street Journal today about Apollo Management and Hexion Specialty Chemicals suing Huntsman Corp., which threatened to derail a large buyout of the latter company. Hexion argued that Huntsman's deteriorating financial performance constituted a material adverse effect on the business, and therefore Hexion could walk away from the deal. Should this contention be accepted by the courts, Hexion would avoid a $325 million breakup fee payable to Huntsman.
Issues related to breakup fees, deal termination and material adverse effect clauses are topics of discussion at The Business Development Academy's Mergers and Acquisitions Due Diligence Courses. For more information, please visit www.bdacademy.com.