CD: Could you provide an overview of M&A-related disputes over the past 12 to 18 months? What would you consider to be the dominant trends?
Roxborough: Buyers are more ready to allege fraud and wrongdoing rather than, or as well as, a more limited breach of a contractual warranty. Another feature we are seeing is referrals to regulators of issues which could be just civil disputes. If a claimant is alleging fraud they may view it is as just another step down the road to refer the matter to regulators. Finally, there is the possibility of creditors and insolvency practitioners reopening insolvency situations and seeking to make claims undoing transactions which they say disadvantaged them and were undervalued. That leaves a long tail of potential exposure. But the dominant trend is buyers alleging fraud.
Lindsay: Deals will all have certain idiosyncrasies that may generate disputes. But when you stand back, prevailing global economic conditions often play a role. Whether it is market volatility which means the asset has a lower or higher value by deal completion, the squeeze in credit markets, particularly in some emerging markets, that means a financing party or shareholder cannot complete or meet their ongoing obligations, or depressed oil prices, these have all played roles in disputes we have seen over the past 12 to 18 months.
Apr-Jun 2016 issue
Clifford Chance; Dechert LLP
Norton Rose Fulbright LLP
Skadden, Arps, Slate, Meagher & Flom LLP