Key Points
In
AB Stable VIII LLC v. Maps Hotels and Resorts One LLC, the Delaware Court of Chancery issued a precedential decision addressing whether a buyer could walk away from an M&A transaction because the target company’s responses to the COVID-19 pandemic constituted either (1) a “material adverse effect” (MAE) or (2) a breach of the covenant to operate in the ordinary course of business between signing and closing (“Ordinary Course Covenant”).
Although the MAE definition did not include an exception for the effects arising from a “pandemic” or “epidemic,” the court found that the impact of COVID-19 on the target’s business fell within the “natural disasters or calamities” exception to the MAE clause and thus did not constitute an MAE.
Jonathan P Stanner named President and Chief Executive Officer and a member of the Board of Directors at Summit Hotel Properties, Inc hospitalitynet.org - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from hospitalitynet.org Daily Mail and Mail on Sunday newspapers.
Summit Hotel Properties Announces Leadership Transition
Dan Hansen to Become Executive Chairman
Jonathan Stanner to Become Chief Executive Officer and Join Board of Directors
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AUSTIN, Texas, Dec. 17, 2020 /PRNewswire/ Summit Hotel Properties, Inc. (NYSE: INN) (the Company ) today announced that Dan Hansen, Chairman, President and Chief Executive Officer will transition to the role of Executive Chairman of the Board of Directors effective January 15, 2021. The Company s Board has elected Jonathan Stanner, the Company s current Executive Vice President, Chief Financial Officer and Treasurer, to become President and Chief Executive Officer and a member of the Board of Directors effective January 15, 2021.
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In the months following the onset of the COVID-19 pandemic, a
slew of parties filed lawsuits in US courts relating to M&A
transactions that were signed prior to March 2020 and that buyers
were seeking to terminate as a result of the pandemic. In these
lawsuits, buyers commonly alleged one (or both) of the following as
justification for their failure to close: (i) that the target
suffered an MAE as a result of COVID-19 s impact on its
business; or (ii) that target materially breached the conduct of
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In the months following the onset of the COVID-19 pandemic, a slew of parties filed lawsuits in US courts relating to M&A transactions that were signed prior to March 2020 and that buyers were seeking to terminate as a result of the pandemic. In these lawsuits, buyers commonly alleged one (or both) of the following as justification for their failure to close: (i) that the target suffered an MAE as a result of COVID-19’s impact on its business; or (ii) that target materially breached the conduct of business covenant by virtue of its actions (or inactions) in response to COVID-19. Despite the initial flurry of litigation activity, many parties settled their disputes prior to trial, such that Vice Chancellor Laster’s recent opinion in