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Hexion Huntsman Merger Agreement

These cases suggest that specific performance rules should be formulated with the greatest possible specificity and carefully considered in the broader context of the full agreement. In particular, the court stated that hexion breached its agreement under the merger agreement by failing to act, by not approaching Huntsman`s management to discuss possible ways to resolve the solvency issue, and by acting affirmatively to “sink” the funding. Following receipt of the notice of insolvency, Hexion had a clear obligation under the merger agreement to discuss with Huntsman the appropriate approach and to inform Huntsman of its concerns. Instead, Hexion`s board of directors took over the results of the insolvency notice, filed a complaint and sent a copy of the expertise to the lead lending bank, which effectively prevented the execution of the financing. In addition, the court found that Hexion was “deliberately dragging its feet” to secure the release of the Federal Trade Commission (FTC) until the result of its attempt to obstruct funding, in further breach of its obligations under the merger agreement. What this blog, otherwise an excellent commentary, does not address is how the Lamb decision very significantly changes the transaction negotiation fund between these parties in favor of Huntsman. In Lamb`s courtroom in an action for damages, there is only Hexion at stake. In Texas, the defendants are not only Hexion, but essentially all of the Apollo investment partnerships, the Apollo Investment Management Unit as well as Leon Black and Josh Harris. And now the banks that finance, including I suppose, are called parties.

Like clear Channel and Genesco, the interests of Hexion, Apollo and its banks are not as synchronous as the day before Lamb`s decision. Now, Hexion/Apollo must keep the banks on the hook to contribute to a comparison, as they are one of the main beneficiaries of a failed deal. This contribution could take the form of liquidity or in the form of a new credit agreement for a new agreement to the CCU. In exchange, Huntsman dropped a lawsuit in Texas to get more than $3 billion from Apollo. It also led Hexion to cooperate with its lawsuit against Credit Suisse and Deutsche Bank, which allowed the two banks that withdrew from an agreement to lend the money needed to complete the merger. in June 2008, Hexion filed an appeal and sought a judgment that (i) it would not be required to close if the resulting business was insolvent; (ii) Huntsman was the victim of an EAF because he was significantly inferior to his industry counterparts and did not meet the forecasts; and (iii) it had fulfilled its provisional commitment to make reasonable efforts to secure the financing of the transaction and, therefore, and in the absence of an EAF, its liability was limited to $325 million for the failure to obtain financing for the closing of the transaction. . .

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