Recently, Gunster shareholder Joseph Chase published an article in the Daily Business Review about COVID-19’s impact on mergers and acquisitions (M&A). He discusses the significant slow-down in mergers and acquisitions during the pandemic, causing many transactions to be called off or put on hold. Chase explores the question: will buyers still be required to close merger and acquisition transactions that were signed prior to the COVID-19 pandemic? In attempting to answer this question, Chase states, parties to M&A acquisition agreements are likely to look first to whether COVID-19 constitutes a “material adverse effect.”
According to Chase, material adverse effect provisions—and the underlying law—are complex and create uncertainty in a situation such as this one. As such, parties to pending M&A transactions should work closely with their legal counsel in order to understand their rights and obligations.
Chase is a shareholder in Gunster’s Corporate Law practice in the firm’s West Palm Beach office. He is dedicated to serving as a trusted advisor to business owners, private equity firms, companies in a wide range of industries, and other clients. Chase represents companies and private equity investors in connection with mergers and acquisitions, divestitures, equity investments and restructurings.
Read the full article here: Will COVID-19 Result in a Material Adverse Effect Under M&A Acquisition Agreements?
