Update: Purchase Price Adjustment Disputes: Drafters Continue to Beware

October 02, 2017

In the Spring 2017 edition of Dechert’s Global Private Equity Newsletter, we reviewed the Delaware Court of Chancery’s decision in Chicago Bridge & Iron Company N.V. v. Westinghouse Electric Company LLC and WSW Acquisition Co., LLC (Del. Ch. December 5, 2016) (“Chicago”). The article, “Purchase Price Adjustment Disputes: Drafters Beware,” highlighted the need for practitioners to consider carefully the effects that post-closing purchase price adjustment provisions can have on seller’s representations and warranties and related remedies, as well as the effects such representations and warranties and related indemnification provisions can have on purchase price adjustments. Although the Delaware Supreme Court reversed the Court of Chancery in Chicago Bridge & Iron Co. N.V. v. Westinghouse Electric Co. LLC and WSW Acquisition Co., LLC (Del. June 27, 2017) (“Westinghouse”), holding that the Court of Chancery’s decision was too broad, practitioners should still continue to consider carefully the potential effects noted above.

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