Mergers and Acquisition Disputes

What are mergers and acquisition disputes?

Mergers and acquisitions (M&A) refer to combining two or more companies, usually through purchase or merger. M&A disputes can arise between the parties involved in the transaction over various aspects of the agreement’s terms. Some common examples of M&A disputes include:

Valuation Disputes: Disputes can arise when the parties involved in the transaction have different views on the target company’s value. This difference in opinion can result in one party feeling that they paid too much for the acquisition or the other party feeling undervalued.
Breach of Contract Claims: Disputes can arise when one party believes the other party has breached the terms of the acquisition agreement. A breach can include claims related to representations and warranties, indemnification, or other obligations.
Integration Disputes: Disputes can arise when the parties have difficulty integrating their operations after the acquisition. Integration disputes often include disagreements over management structure, cultural differences, or other issues that can impede the post-merger integration process.
Intellectual Property Disputes: Disputes can arise when the parties disagree over ownership of intellectual property rights, including patents, trademarks, or other forms of intellectual property.

Need help with a matter related to mergers and acquisition disputes? Schedule your consultation today with a top shareholder disputes and derivative litigation attorney.

In Florida, which laws and regulations apply to M&A disputes?

Florida laws that relate to M&A disputes include:

Florida Business Corporation Act (FBCA): This set of statutes sets out the rules governing the formation, operation, and dissolution of corporations in Florida, including rules related to mergers and acquisitions. In particular, Florida Statutes 607.1101 – § 607.1107 outline requirements for various mergers.
Florida Securities and Investor Protection Act: This act provides protections for investors in Florida and regulates the offer and sale of securities in the state, including in connection with M&A transactions.

Federal laws that relate to M&A disputes include:

The Hart-Scott-Rodino Antitrust Improvements Act: This law requires companies to notify the Federal Trade Commission and the Department of Justice before certain mergers or acquisitions occur. The purpose of the law is to allow regulators to review the transaction for potential antitrust concerns.
The Sherman Antitrust Act: This law prohibits anti-competitive behavior and prohibits mergers that would substantially lessen competition in a particular market. The Federal Trade Commission and the Department of Justice enforce the Sherman Act.
The Securities Exchange Act of 1934: This law regulates the offer and sale of securities in the United States, including securities issued in connection with mergers and acquisitions. The Securities and Exchange Commission is responsible for enforcing the Securities Exchange Act.

When a set of facts is appropriate to litigate mergers and acquisition disputes, there are many paths a claimant may take. We are value-based attorneys at Jimerson Birr, which means we look at each action with our clients from the point of view of costs and benefits while reducing liability. Then, based on our client’s objectives, we chart a path to seek appropriate remedies.

To determine whether your unique situation may necessitate litigation, please contact our office to set up your initial consultation.

What evidence does a plaintiff generally need to file a lawsuit stemming from an M&A dispute, and what are common legal defenses to those claims?

Generally, a plaintiff must present evidence supporting their claim and demonstrating that the defendant breached a legal duty owed to the plaintiff. Some common types of evidence to support M&A dispute claims include:

Contract documents: The acquisition agreement and related documents can provide evidence of the terms of the transaction and any alleged breaches of those terms.
Communications: Emails, letters, and other communications between the parties can provide evidence of their intent and any alleged misrepresentations or fraud.
Financial records: These records and other data can support claims related to valuation or earn-out disputes.
Expert testimony: Expert testimony may provide evidence related to the industry, the value of the company, or other relevant topics.
Corporate records: These records, including board minutes and shareholder agreements, can be used to support claims related to corporate governance or conflicts of interest.

Common legal defenses to M&A claims include:

Business judgment rule: Shareholders and directors may claim they acted in good faith and in the best interests of the company and all shareholders and that their actions were protected by the business judgment rule, which presumes that corporate decisions are made in good faith and with due care.
Good faith and fair dealing: Defendants may argue that they acted in good faith and in compliance with their contractual obligations.
Fair price: Defendants may argue that the price offered for the minority shares was fair and reasonable based on independent valuation and other factors.
No breach of fiduciary duty: Defendants may argue that they didn’t breach their fiduciary duties to the company or minority shareholders and that the merger or acquisition was for legitimate business reasons.
Failure to state a claim: Defendants may argue that the plaintiff has not alleged a legally valid claim or that they have failed to present evidence to support their claim.

To see what actions or defenses may be available for your unique situation, please contact our office to set up your initial consultation.

Frequently Asked Questions

What are common underlying claims in M&A disputes?

Common claims in M&A disputes include breach of contract, fraud and misrepresentation, breach of fiduciary duty, and violations of securities laws.

How are M&A disputes typically resolved?

Alternative dispute resolution, including negotiation, mediation, and arbitration, and litigation are standard methods for resolving M&A disputes. The specific form of resolution will depend on the nature of the dispute and the preferences of the parties involved.

What are some strategies for avoiding M&A disputes?

Some strategies for avoiding M&A disputes include conducting thorough due diligence, clearly defining the transaction terms in the acquisition agreement, anticipating potential issues, and addressing them in advance. In addition, working with experienced attorneys and other professionals throughout the M&A process is essential to minimize the risk of disputes.

Have more questions about a mergers and acquisition dispute-related situation?

Crucially, this overview of mergers and acquisition disputes does not begin to cover all the laws implicated by this issue or the factors that may compel the application of such laws. Every case is unique, and the laws can produce different outcomes depending on the individual circumstances.

Jimerson Birr attorneys guide our clients to help make informed decisions while ensuring their rights are respected and protected. Our lawyers are highly trained and experienced in the nuances of the law, so they can accurately interpret statutes and case law and holistically prepare individuals or companies for their legal endeavors. Through this intense personal investment and advocacy, our lawyers will help resolve the issue’s complicated legal problems efficiently and effectively.

Having a Jimerson Birr attorney on your side means securing a team of seasoned, multi-dimensional, cross-functional legal professionals. Whether it is a transaction, an operational issue, a regulatory challenge, or a contested legal predicament that may require court intervention, we remain a tireless advocate every step of the way. Being a value-added law firm means putting the client at the forefront of everything we do. We use our experience to help our clients navigate even the most complex problems and come out the other side triumphant.

If you want to understand your case, the merits of your claim or defense, potential monetary awards, or the amount of exposure you face, you should speak with a qualified Jimerson Birr lawyer. Our experienced team of attorneys is here to help. Call Jimerson Birr at (904) 389-0050 or use the contact form to schedule a consultation.