Business News Digest

Featured Article

This month's featured article discusses potential minority shareholder issues that may arise in relation to structuring a private acquisition as a merger in Delaware and provides recommendations on ways to address them.

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Structuring a Private Company Acquisition as a Merger in Delaware? Be Careful with Post-Closing Obligations for Non-Signing Shareholders

Mergers are a popular structure for a private company acquisition for many reasons, one of which is that under Section 251 of the Delaware General Corporation Law (DGCL) and similar statutes in other states, a deal can be closed without the unanimous consent of all shareholders, as long as it is approved by the requisite number of shareholders under the company's governing documents and applicable law. This can be useful in deals where an entity is controlled by a large number of shareholders because it eliminates the need to reach out to every single shareholder, which can be a logistical challenge. It also is helpful when a minority owner is not interested in selling their interests in the company, as it offers the buyer some leverage if such minority shareholder attempts to block the transaction or negotiate additional consideration.

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