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Articles by Thomas Yadlon
Promissory Fraud, “Puffery” And Earn-Outs: Delaware Court Of Chancery Provides More Guidance In Shareholder Representative Services LLC v. Sphera Solutions, Inc.
As we have observed in our April 2026 Advisory regarding Camaisa v. Pharmaceutical Research Associates, Inc. and Fortis Advisors LLC v. Johnson & Johnson and our July 2024 Advisory regarding Trifecta Multimedia Holdings Inc. v. WCG Clinical Services LLC, the Delaware courts have made it clear in cases involving earn-out disputes that buyers would be well advised to insist upon the inclusion of anti-reliance provisions in their favor in applicable acquisition agreements.
Earn-Outs And Other Forms Of Contingent Consideration: Recent Delaware Decisions And Drafting Takeaways
In our July 2024 Advisory regarding Trifecta Multimedia Holdings Inc. v. WCG Clinical Services LLC, we noted the importance, in the earn-out context, of distinguishing between extra-contractual statements that may be treated as actionable representations and those that may be dismissed as mere "puffery," and we highlighted the significance of clear anti-reliance language in acquisition agreements. Two more recent Delaware decisions — the Court of Chancery's post-trial opinion in Camaisa v.
Earn-Outs and Other Forms of Contingent Consideration: Recent Delaware Decisions and Drafting Takeaways
In our July 2024 Advisory regarding Trifecta Multimedia Holdings Inc. v. WCG Clinical Services LLC, we noted the importance, in the earn-out context, of distinguishing between extra-contractual statements that may be treated as actionable representations and those that may be dismissed as mere “puffery,” and we highlighted the significance of clear anti-reliance language in acquisition agreements. Two more recent Delaware decisions — the Court of Chancery’s post-trial opinion in Camaisa v.
Arnold & Porter Discusses Delaware Decision On Whether Soft-Earnout "Promises" Are Fraud Or Puffery
When a portion of the purchase price in an acquisition is contingent on the earnings or other performance metric(s) of the acquired business post-closing (i.e., an "earn-out" provision), buyers and sellers routinely discuss their aspirations and expectations regarding the go-forward operation and performance of the acquired business during the transaction negotiations.1 These discussions are a necessary part of arriving at the agreed economics for the earn-out and also help the seller get...
Soft Earn-Out "Promises" As Potential Fraud Or Merely Puffery: Delaware Chancery Court Provides Guidance In Trifecta
When a portion of the purchase price in an acquisition is contingent on the earnings or other performance metric(s) of the acquired business post-closing (i.e., an “earn-out” provision), buyers and sellers routinely discuss their aspirations and expectations regarding the go-forward operation and performance of the acquired business during the transaction negotiations.
Soft Earn-Out “Promises” as Potential Fraud or Merely Puffery: Delaware Chancery Court Provides Guidance in Trifecta
When a portion of the purchase price in an acquisition is contingent on the earnings or other performance metric(s) of the acquired business post-closing (i.e., an “earn-out” provision), buyers and sellers routinely discuss their aspirations and expectations regarding the go-forward operation and performance of the acquired business during the transaction negotiations.
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