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Legal Update

Delaware Supreme Court Ruling Suggests Potential Buyers in M&A Deals Likely Have Limited Recourse Against Sellers Prior to Signing Agreement

20 June 2012
Mayer Brown Legal Update
With its recent decision in RAA Management, LLC v. Savage Sports Holding, Inc., the Delaware Supreme Court has reminded potential buyers in M&A transactions that they likely will have very limited, if any, remedies or recourse against the seller in connection with the potential transaction until an agreement is signed. In light of this reality, buyers should enter into the due diligence process with full knowledge of this potential risk and consider whether it is possible, under the circumstances, to delay relatively expensive aspects of the due diligence review (e.g., outside consultants) until later in the due diligence process when a deal is more certain.
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