With two national insurance companies at odds after terminating their $54 billion merger, Corporate & Securities partner Byron F. Egan provided insights regarding the Delaware court system and the role “best efforts” plays in the trial.
“Certainly, how Delaware’s courts approach and analyze best efforts duties will affect everybody, so that’s probably why there’s so many people watching that case,” Byron said. “Best efforts, reasonable best efforts, commercially reasonable efforts—how you phrase—that’s highly negotiated. So what a court thinks that language means in a particular case is going to be important to a lot of lawyers, because we’re all going to deal with it.”
He added: “The magnitude of the issues in this case, the dollars and cents associated with it, is not what most lawyers, most of the time, will do. In fact, even lawyers in this case don’t usually handle cases like this. It’s certainly a flagship in terms of magnitude, but the issues are common in a lot of transactions.”
Best efforts, reasonable best efforts, commercially reasonable efforts—how you phrase—that’s highly negotiated.
Byron is experienced in business entity formation and governance matters, M&A, and financing transactions in a wide variety of industries, including energy, entertainment, financial, insurance, restaurant, and technology. He advises boards of directors and their audit, compensation, and special committees with respect to fiduciary duty and other corporate governance issues, the Sarbanes-Oxley Act, special investigation, and other issues. In 2018, he published the second edition of EGAN ON ENTITIES: Corporations, Partnerships and Limited Liability Companies in Texas, a treatise on the Texas Business Organizations Code.
For the full story, view Law360’s “Anthem-Cigna Trial To Weigh ‘Best Efforts’ On Failed Deal” (subscription required).