The US Delaware Supreme Court affirms a termination of merger agreement due to the inability of a party to deliver a necessary tax opinion (Energy Transfer / Williams)

Resolving a dispute surrounding one of the largest M&A deals of 2015, the Delaware Supreme Court affirmed the Delaware Chancery Court’s decision allowing Energy Transfer Equity, L.P. to terminate its proposed acquisition of The Williams Companies, Inc. due to the inability of Energy Transfer’s tax counsel to deliver a necessary tax opinion. The Supreme Court focused its decision on Energy Transfer’s obligation to use its “reasonable best efforts” to complete the deal and “commercially reasonable efforts” to obtain the required tax opinion. These covenants, it found, were affirmative obligations of Energy Transfer to take all reasonable actions to complete the merger. This contrasted with the Chancery Court’s decision that Energy Transfer satisfied its

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J. William Dantzler, Gregory Pryor, The US Delaware Supreme Court affirms a termination of merger agreement due to the inability of a party to deliver a necessary tax opinion (Energy Transfer / Williams), 23 March 2017, e-Competitions Bulletin Energy & Mergers, Art. N° 83644

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