China Forex Liberalization Unlocks Massive M&A Opportunities for Foreign Invested Enterprises

On October 23rd, 2019, the China State Administration of Foreign Exchange (“SAFE”) issued a Circular on Further Promoting the Facilitation of Cross-border Trade and Investment (Hui Fa [2019] No.28) (《关于进一步促进跨境贸易投资便利化的通知(汇发[2019]28 号)》, “Circular 28“). The Circular 28 sets out 12 reform measures aiming to streamline the foreign exchange process in cross-border trade and ease controls over cross-border investments. But the highlight of the Circular clearly is the relaxation of foreign exchange controls over foreign-invested enterprises (“FIE”) utilizing funds converted from foreign...

Preparing for LIBOR Substitution: Commercial and Consumer Lending Considerations

As of December 31, 2021 (the “Effective Date”), the use of LIBOR as an index for commercial and consumer loans will likely cease—which presents lenders and other industry participants with the challenges to address: (a) the process for replacing LIBOR as an index for commercial and consumer loans outstanding as of the Effective Date that employ LIBOR as an index; and (b) how to proactively anticipate the end of LIBOR by beginning to substitute a new index for LIBOR between...

State of Delaware Entity Statute Update

The State of Delaware typically amends its entity statutes annually to ensure that the statutes are state of the art and most effectively meet the needs of the changing business community.  Consistent with this practice, this year’s amendments to Delaware’s Limited Liability Company Act (the “LLC Act”), Revised Uniform Limited Partnership Act (the “LP Act”), Revised Uniform Partnership Act and General Corporation Law went into effect on August 1, 2019. Notably, the amendments to each of Delaware’s entity statutes establish...

Next Level Due Diligence

Nearly every M&A transaction begins with a look at the possibilities: the strategic fit; the synergies; the drivers for the deal. Naturally enough, the next step will turn to an evaluation of risk.  Traditionally, legal exposure from toxic tort and other forms of product liability has rated high on the list of issues to identify and protect against — up there with environmental liabilities and compliance exposures. Recently, however, eye-popping damage awards have raised the stakes, suggesting that acquirers may...

MAE is MIA No Longer: Delaware Court Upholds Use of “Material Adverse Event” Clause for the First Time

In Akorn, Inc. v. Fresenius Kabi AG, the Delaware Chancery Court held that Fresenius, a German pharmaceutical company, was justified in invoking a “material adverse event” (MAE) clause to terminate its $4.8 billion merger agreement with American generics manufacturer Akorn, Inc.  Although MAE clauses are common in large transactions, Akorn marks the first time that the Chancery Court has upheld a buyer’s use of such a clause to back out of a merger agreement. Nevertheless, the Court’s reasoning suggests that...