DEAL LITIGATION

Columbia Law School Deal Litigation Seminar L8183 WJWH 101 Tuesdays 6:20 pm 8:10 pm

William Savitt 212.403.1329 wsavitt@wlrk.com Ryan A. McLeod 302.856.4243 rymcleod@gmail.com

SYLLABUS
Brief description. This seminar is designed as an introduction to mergers and acquisitions litigation. The course aims to provide both a practical and doctrinal perspective on M&A-related litigation and will rely heavily on readings and issues derived from practice in the Delaware courts (where much contemporary deal litigation occurs). Students will be asked to apply cases and legal principles in various practical situations that may arise in a transactional litigation practice. Familiarity with basic corporate law principles is assumed. Classes and readings. As outlined below, the class will meet in fourteen weekly sessions. The first segment of the course will introduce basic doctrinal principles and provide an introduction to the litigators role in the transactional setting. The remaining sessions will revolve around four detailed case studies, with seminar members divided into group roles. Readings for these sessions will include case scenarios, supporting materials, relevant case law and articles, and interactive communication with the class and instructors. The attendance and active participation of seminar members is essential. Readings for all classes will be provided via COURSEWEBS. Assigned cases will generally be abridged in these course materials. Revisions to the syllabus and its assignments will be announced in advance of class by email. Written assignments and grading. Students will be expected to (i) participate actively in class; (ii) prepare informal pieces of writing associated with class assignments (such as preparing court papers); and (iii) write a final paper (~ 12-15 pages). These assignments will count as follows toward the final grade: final paper (~ 50%); shorter writing assignments (~25%); class participation (~ 25%). Students who complete the course requirements are eligible to receive writing credit. Major writing credit is also available.

SUMMARY OF CLASS MEETINGS AND READINGS

Class 1 (September 4): The Role of Litigators in Corporate Deals

Introduction to the course: litigation as an element of deal practice; the transactional significance and risks of diverse litigation choices; the litigators role in creating a favorable record; and the interplay of transactional lawyers and litigators in the context of complex transactions. Recommended reading Courtney A. Rosen, The Litigators Role in M&A Transactions, in MANAGING CORPORATE GOVERNANCE ISSUES IN M&A (2010) William H. Rehnquist, The Prominence of the Delaware Court of Chancery in the State-Federal Joint Venture of Providing Justice, 48 BUS. LAW. 351 (1992) Len Costa, Boss of the Bosses, 2005-Aug. LEGAFF 43 (July/August 2005) David Katz, Glossary of M&A Terms (general reference) William Savitt, The Genius of the Modern Chancery System, 2 COLUMBIA BUS. L. REV. 570 (2012) * * * * *

Class 2 (September 11): Doctrinal Overview

Review of leading cases that form the framework for litigation advice in the transactional context. Class will emphasize not only case holdings, but also the underlying strategic decisions of the lawyers in those cases and how those decisions affected the courts ruling and the outcome of the transaction. Required reading Smith v. Van Gorkom, 488 A.2d 858 (Del. 1985) Unocal Corp. v. Mesa Petroleum Co., 493 A.2d 946 (Del. 1985) Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173 (Del. 1985) Paramount Communications, Inc. v. Time Inc., 571 A.2d 1140 (Del. 1990) Lyondell Chem. Co. v. Ryan, 970 A.2d 235 (Del. 2009) Recommended reading Unitrin, Inc. v. American Gen. Corp., 651 A.2d 1361 (Del. 1995) Excerpts from E. Norman Veasey & Christine T. DiGuglielmo, What Happened in Delaware Corporate Law and Governance from 1992-2004? A Retrospective on Some Key Developments, 153 U. PA. L. REV. 1399 (2005) * * * * *

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Class 3 (September 18): Deal Negotiation and DraftingLitigation Issues

Advising transactional attorneys and clients in the negotiation process; advising with respect to potential deal terms in the shadow of uncertain case law and litigation uncertainties; litigation due diligence; litigation review of draft merger agreements. Required reading Annotated Merger Agreement In re Toys R Us, Inc., Sholder Litig., 877 A.2d 975 (Del. Ch. 2005) Gregory V. Varallo & Srinivas M. Raju, A Process Based Model for Analyzing Deal Protection Measures, 55 BUS. LAW. 1609 (2005) United Rentals, Inc. v. RAM Holdings, Inc., 937 A.2d 810 (Del. Ch. 2007) David Marcus, Why Contracts Matter, The Deal, Oct. 12, 2007 Brad Karp, The Litigation Angle in Drafting Commercial Agreements, 1459 PLI/CORP. 343 (2004) In re IBP, Inc. Sholders Litig., 789 A.2d 14 (Del. Ch. 2001) Hexion Specialty Chemicals, Inc. v. Huntsman Corp., 965 A.2d 715 (Del. Ch. 2008) Deal Litigation Seminar, Inc. Asset Sale Agreement (case study) Recommended reading Alliance Data Sys. Corp. v. Blackstone Cap. Partners V L.P., 963 A.2d 746 (Del. Ch. 2009) NACCO Indus., Inc. v. Applica, Inc., C.A. No. 2541-VCL, 2009 WL 4981577 (Del. Ch. Dec. 22, 2009) Leo E. Strine, Jr., Categorical Confusion: Deal Protection Measures in Stock-for-Stock Merger Agreements, 56 BUS. LAW. 919 (2001) Mary Jane Auer, The Breakup Breakdown, The Daily Deal, Apr. 5, 2000 Steven M. Davidoff, The MAC Is Back, but Does It Kill a Deal?, DEALBOOK, NYTIMES.COM (Aug. 23, 2011) * * * * *

Class 4 (September 25): Procedural Overview

Selected procedural aspects of deal litigation: jurisdictional issues related to transactional litigation; forum and timing considerations; discovery-related issues; expedition; and attorneys fees. Selected materials relating to standing and forum Cornerstone Brands, Inc. v. OSteen, 2006 WL 2788414 (Del. Ch. Sept. 20, 2006) El Paso Natural Gas Co. v. TransAmerican Natural Gas Corp., 669 A.2d 36 (Del. 1995) Omnicare, Inc. v. NCS Healthcare, Inc., 809 A.2d 1163 (Del. Ch. 2002), appeal dismissed as moot, 818 A.2d 914 (Del. 2003) In re The Topps Co. Sholders Litig., 924 A.2d 951 (Del. Ch. 2007) In re Allion Healthcare Inc. Sholders Litig., C.A. No. 5022-CC, 2011 WL 1135016 (Del. Ch. Mar. 29, 2011) -3-

Selected materials relating to expedited process Giammargo v. Snapple Beverage Corp., 1994 WL 672698 (Del. Ch. Nov. 15, 1994) Morton v. Am. Mktg. Indus. Holdings, Inc., 1995 WL 1791090 (Del. Ch. Oct. 5, 1995) In re 3Com Shareholders Litigation, 2009 WL 5173804 (Del. Ch. Dec. 18, 2009) Selected materials relating to attorneys fees In re Cox Communications, Inc. Sholders Litig., 879 A.2d 604 (Del. Ch. 2005) Alaska Electrical Pension Fund v. Brown, 988 A.2d 412 (Del. 2010) In re Sauer-Danfoss Inc. S'holders Litig., C.A. No. 5162-VCL, 2011 WL 2519210 (Del. Ch. May 3, 2011) Recommended reading In re IBP, Inc. Sholders Litig., 2001 WL 406292 (Del. Ch. Apr. 18, 2001) In re Intl Jensen Inc. Sholders Litig., 1996 WL 422345 (Del. Ch. July 13, 1996) E. Norman Veasey, The Roles of the Delaware Courts in Merger and Acquisition Litigation, 26 DEL. J. CORP. L. 849 (2001) Anywhere But Chancery: Ted Mirvis Sounds an Alarm and Suggests Some Solutions, M&A J. (May 2007) * * * * *

Class 5 (October 2): Practitioners Panel

For this class meeting we will arrange a guest presentation from one or more practitioners in the area of deal litigation, including a representative of the plaintiffs bar in this area. Readings will be posted. * * * * *

Classes 67 (October 9, October 16): Case Study IThe Friendly Deal Turned Hostile

This case study will involve a negotiated transaction that is subsequently challenged by a third party who wishes to break up the deal and acquire for itself the target company. After initial group discussion of the problem and source materials, students will be divided into three litigation groups for this case study: target company, original acquirer, and late bidder. Assignments to be determined. Complete case study materials will be distributed in class. Required reading Paramount Communications, Inc. v. QVC Network, Inc., 637 A.2d 34 (Del. 1994) Omnicare, Inc. v. NCS Healthcare, Inc., 818 A.2d 914 (Del. 2003) La. Munic. Police Employees Ret. Sys. v. Crawford, 918 A.2d 1172 (Del. Ch. 2007) In re Topps Co. Sholders Litig., 926 A.2d 58 (Del. Ch. 2007) In re Dollar Thrifty Sholder Litig., C.A. No. 5458-VCS, 2010 WL 3503471 (Del. Ch. Sept. 8, 2010) -4-

Recommended reading Mills Acquisition Co. v. MacMillan, Inc., 559 A.2d 1261 (Del. 1989) NBT Bancorp Inc. v. Fleet/Norstar Financial Group, 664 N.E.2d 492 (N.Y. 1996) Ventas, Inc. v. Health Care Property Investors, Inc., 635 F. Supp. 2d 612 (W.D. Ky. Jul. 16, 2009) Steven M. Davidoff, The Long, Slow Death of Omnicare, DEALBOOK, NYTIMES.COM (Aug. 28, 2008, 4:22 PM), http://dealbook.blogs.nytimes.com/2008/08/28/the-long-slowdeath-ofomnicare * * * * *

Classes 89 (October 23, October 30): Case Study IIHostile Tender Offer/Pill Litigation

This case study will involve an unsolicited bid for a target company not otherwise in play and a challenge to the incumbent boards use of the poison pill and other strategic defenses. After initial group discussion of the problem and source materials, students will be divided into groups. Assignments to be determined. Complete case study materials will be distributed in class, by email, and by COURSEWEBS. Required reading Moran v. Household Intl, Inc., 500 A.2d 1346 (Del. 1985) Quickturn Design Sys., Inc. v. Shapiro, 721 A.2d 1281 (Del. 1998) Carmody v. Toll Bros., 723 A.2d 1180 (Del. Ch. 1998) Blasius Indus., Inc. v. Atlas Corp., 564 A.2d 651 (Del. Ch. 1988) Air Prods. & Chems., Inc. v. Airgas, Inc., 16 A.3d 48 (Del. Ch. 2011) Recommended reading City Capital Assocs. Ltd. v. Interco, Inc., 551 A.2d 787 (Del. Ch. 1988) Leo Strine, The Story of Blasius Industries v. Atlas Corp.: Keeping the Electoral Path to Takeovers Clear, in CORPORATE LAW STORIES 243, 266-67 (J. Mark Ramseyer ed., 2009) Andrea Musalem, Esq., Institutional Shareholder Services, 2007 Background Report: Poison Pills (Feb. 2007) Victor I. Lewkow, Sarah G. Siethoff, The Embattled Poison Pill, 19 No. 4 INSIGHTS 13 (2005) Yucaipa Am. Alliance Fund II, L.P. v. Riggio, C.A. No. 5465-VCS (Del. Ch. Aug. 12, 2010) * * * * *

Classes 1011 (November 6, November 13): Case Study IIIDisclosure/Revlon Litigation

This case study will involve a challenge to the disclosures disseminated in connection with a public company merger and the role of the target boards financial advisor. Complete case study materials will be distributed in class.

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Required reading In re Del Monte Foods Co. Sholders Litig., --- A.3d ---, 2011 WL 1677458 (Del. Ch. 2011) In re Atheros Commcns, Inc., C.A. No. 6124-VCN, 2011 WL 864928 (Del. Ch. Mar. 4, 2011) Wayne County Employees Ret. Sys. v. Corti, 954 A.2d 319 (Del. Ch. 2008) Maric Capital Master Fund, Ltd. v. Plato Learning, Inc., 11 A.3d 1175 (Del. Ch. 2010) In re El Paso Corp. Sholder Litig., C.A. No. 6949-CS (Del. Ch. Feb. 29, 2012) In re Delphi Fin. Grp. Sholder Litig., C.A. No. 7144-VCG (Del. Ch. Mar. 6, 2012) Recommended reading Blake Rohrbacher & John Mark Zeberkiewicz, Fair Summary: Delawares Framework for Disclosing Fairness Opinions, 63 BUS. LAW. 881 (2008) In re Answers Corp. Sholders Litig., C.A. No. 6170-VCN, 2011 WL 1366780 (Del. Ch. Apr. 11, 2011) In re Lear Corp. Sholder Litig., 926 A.2d 94 (Del. Ch. 2007) * * * * *

Classes 1213 (November 20, November 27): Case Study IVGoing-Private Transactions and Litigation Settlement

This case study will involve a proposal by a controlling shareholder to buy out the minority public shareholders in a transaction opposed by certain of the public shareholders. After initial group discussion of the problem and source materials, students will be divided into groups. Assignments to be determined. Complete case study materials will be distributed in class. Required reading Kahn v. Lynch Communications Sys., Inc., 638 A.2d 1110 (Del. 1994) In re Siliconix Inc. Sholder Litig., 2001 WL 716787 (Del. Ch. June 19, 2001) Selected materials from In re CNX Gas Corp. Sholders Litig., C.A. No. 5377-VCL (Del. Ch. 2010) In re Synthes, Inc. S'holder Litig., C.A. No. 6452-CS (Del. Ch. Aug. 17, 2012) In re Revlon, Inc. Sholders Litig., 990 A.2d. 940 (Del. Ch. 2010) Americas Mining Corp. v. Theriault (In re Southern Peru), No. 29, 2012 (Del. Aug. 27, 2012) Recommended reading In re Cysive, Inc. Sholder Litig., 836 A.2d 531 (Del. Ch. 2003) In re John Q. Hammons Hotels Inc. Sholders Litig., C.A. No. 758-CC, 2009 WL 3165613 (Del. Ch. Oct. 2, 2009) In re SS&C Techs., Inc. Sholders Litig., 911 A.2d 816 (Del. Ch. 2006) Ronald J. Gilson & Jeffrey Gordon, Doctrines and Markets: Controlling Controlling Shareholders, 152 U. PA. L. REV. 785 (2003) -6-

Classes 14 (December 4): Conclusion

For our final class we will arrange a Q&A session with a Delaware jurist. Details will be provided.

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