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On November 30, 2020, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery issued a post-trial decision addressing contractual issues related to the effects of the COVID-19 pandemic on the sale of a collection of luxury hotels. The case,
AB Stable VIII LLC v. MAPS Hotels and Resorts One LLC, was one of many busted deal lawsuits filed in the Court of Chancery implicating COVID-19 s impact on M&A, with the opinion being the first to formally address these issues. The 242-page opinion found that the pandemic did not cause a material adverse effect (MAE) on the seller s business under the contract. But the court found that the buyer was entitled to walk away from the deal because the seller had changed its business in response to the pandemic, breaching its ordinary course covenants in the sale agreement. Both holdings are noteworthy given that busted deal disputes in the pandemic have largely focused on these