Your second citation actually agrees with the speaker that the ConEd case changes what courts will decide and that merger agreements should be changes to reflect that, although they are not.
Your first citation does work to try to claim that ConEd was unique in the facts of the case (mostly summed up on pages 340-341 of your citation), but... First of all, a number of the claimed unique elements apply as well to the Silicon Motion/MaxLinear case -- our merger agreement also says that in cases of Willful and Material Breach "the aggrieved party" receives uncapped damages, our case also involves a level of damages that would bankrupt the acquirer (I'm not sure why they think that should sway the court, but they list this as a differentiating factor and it equally applies here), and our merger agreement also lists exceptions to the No Third Party Beneficiaries without listing shareholder expectation damages as an exception.
More importantly, although both that article (from 2009) and your post try to suggest that ConEd is old precedent and not relevant anymore, newer cases continue to cite it for precisely the conclusion the speaker made. The Cineplex/Cineworld case is from 2021 and reaches the same conclusion. And Chancellor McCormick just last year in one of her written decisions regarding the Crispo/Twitter case again cites ConEd as indicating that shareholder expectations damages are not to be awarded when a merger breaks, unless specifically contracted for as some do. She admits that Delaware courts may view it slightly differently and less of a blanket rule, but mostly for other situations where it was clear that the post-merger obligations were to the selling shareholders, not in cases of deal break. (Her opinion can be found [url=https://courts.delaware.gov/Opinions/Download.aspx?id=338960]https://courts.delaware.gov/Opinions/Download.aspx?id=338960v[/url] ; the relevant section goes from pages 5-24 of her opinion.)
As for the Wells Fargo commitment ending, MaxLinear is hardly an unbiased source and their statement doesn't make it so. Besides, of course they will say the commitment is over because they claim that the agreement was terminated legally. Their unsupported statement on the topic should not update you one way or the other. As for the August 7th date, nowhere in the financing commitment (filed with the SEC) does the date August 7th appear, nor does any proxy for the date appear (e.g. language such as "the agreed-upon ending time", "the Outside Date", "the deadline", etc.).
And it doesn't really make a difference how simple or complex the case is. It takes time to argue over who should be the arbitrators, then over scheduling, then over discovery, then depositions and expert reports; you're being naive about the timeline. (By the way, even a $160 million case is on the large side for SIAC cases.)
As for Cayman case law, obviously Singapore tribunals cannot establish Cayman case law; only a Cayman court can do that. But if the arbitrators have to guess as to how to apply undecided Cayman law, following how the US courts (2nd Cirucit, at least) and Canadian courts and apparently Delaware courts apply the substantially similar law is the way to bet.
You say merger lawyers know what they're doing. Sure. The Twitter legal team specifically inserted into the contract that damages will include lost shareholder premium. The Silicon Motion legal team did not. Why not? Anyone's guess, but it's probably like your citations make clear, that neither party was willing to make it absolutely clear via unambiguous language against their own interests and they opted to leave the language unclear and ambiguous. |
