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Technology Stocks : Silicon Motion Inc. (SIMO) -- Ignore unavailable to you. Want to Upgrade?

To: Anonymous895 who wrote (2712)	8/15/2023 4:07:03 PM
From: Elroy	Read Replies (1) \| Respond to of 2977

Yes, I understand your position. I guess I'm just very surprised how little online commentary there is on this topic, and how little information we have about the level of precedence established by ConEd as opposed to "one off law" which applied only to the Con Ed situation (where there were shareholders suing the breacher for damages). It seems like quite a big deal, so I'm surprised there's almost no discussion of it online or since 2006 when Con Ed got decided. Logically, the idea that SIMO shareholders were harmed, but SIMO the company was not, and therefore SIMO the company was not damaged, and therefore MXL breaching the deal incurs damage penalties which have almost nothing to do with the deal price......seems a tough nut to swallow. Maybe it's so, but it seems a strange method of penalizing material breachers. In fact, do we know if the Con Ed case involved a material breach by the buyer in the judgment, or the "no shareholder consideration" was the decision when judging something else? I think a lengthy arbitration timeline favors SIMO and harms MXL. If MXL is going to argue SIMO's long term earnings power was materially impaired, it may be harder to prove in 2025 if SIMO is delivering record profits at that time. Yeah, I don't know how long it will take, but MXL's case seems so weak, and MXL has said evidence of their claims is in the undisputable record. It sounds like the public record. How long can it take to collect and report to the court the undisputable public record? Maybe MXL delays, but still, I don't see a reason for it to be a lengthy arbitration. Nevetheless, MXL hasn't explained a single detail, so we really don't know what they're going to argue in arbitration. SIMO's argument appears to be "MXL is making stuff up". For precedent, is there no cancelled deal where the deal price was a factor in cancellation damages? I would think this exists.....somewhere. But I don't know. It just seems odd that the deal price may be a non-issue in determining damages. 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.* Agreed. All M&A lawyers must know of the Con Ed case, and the majority of them appear to ignore it. It indicates the case is not precedent, it's a one off. How else do you explain the lawyers ignore the Con Ed case in drafting M&A agreements? They're all just stupid and lazy? Doubtful. And where are the following cases that used Con Ed to prove that the deal price is not an issue in damages? Don't know. We need legal experts here! And I wonder what is English law on the subject, as I think that will affect Cayman law more than a few US cases. But yes, it's something to watch for as the process unfolds. Got it. SIMO's press release discusses both the failure to close by the outside date ($160m) and the late July allegedly unlawful terminations (substantial damages) as issues they intend to pursue. So they're going to (one would think) go for shareholder damages. Whether they get it or not I don't know, but I think they're going to try. --- 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. Do you have a list of cases that sited Con Ed as support for the idea that the deal price should not be material part of assessing damages suffered by seller when the buyer unlawfully terminates the deal? It just seems strange to me (and I think to most normal people) that damage suffered by the owners of the company (shareholders) is separate from damage suffered by the company. SIMO's value dropped from $3.5 billion (deal value) to it's current $1.8 billion due to MXL's actions. How that valuation drop is not a damage to SIMO is sort of perplexing......