USA Law and Practice Contributed by: Elena Rubinov, George Casey, Heiko Schiwek, Vinita Sithapathy, Pierre-Emmanuel Perais and Clara Pang, Linklaters LLP
Where the buyer has a collectively bargained work- force, attention is needed regarding participation in multi-employer pension plans sponsored by unions, and whether the transaction structure triggers with- drawal liability. Health plans Buyers must determine whether health plans are self- insured and assess stop-loss coverage. Parties must understand the Consolidated Omnibus Budget Rec- onciliation Act (COBRA) and similar state law obliga- tions for providing health insurance continuation cov- erage. Certain states may require payout of accrued leave or other benefits. Buyers must also consider the terminability of retiree medical liability and apportion- ment of plan liability. Golden Parachute Excise Taxes Section 280G (and the companion Section 4999) of the Code applies to certain “golden parachute” payments and benefits to certain employees in connection with certain change-of-control transactions. If triggered, excise taxes may be imposed on key executives, and the company may lose corporate deductions. 5.7 Currency Control/Central Bank Approval This is not applicable in the USA. 6. Recent Legal Developments 6.1 Significant Court Decisions or Legal Developments Following Delaware case law decisions involving con- flicted directors and officers or controlling shareholder transactions, in March 2025, the governor of Delaware enacted several amendments to the DGCL. The amended Section 144 of the DGCL provides that liability safe harbours can apply in an act or transac- tion between a corporation and: • a director or officer or entity where a director or officer has a financial interest, if (i) after the dis- closure of such relationship or interest the board or board committee authorises such transaction in good faith and without gross negligence by the affirmative vote of a majority of disinterested
directors; or (ii) such act or transaction is approved or ratified by an informed, uncoerced, affirmative vote of a majority of votes cast by the disinterested shareholders (“Disinterested Shareholder Approv- al”); • a controlling shareholder or control group or for which a controlling shareholder or control group perceives a financial or other benefit not shared with other shareholders generally, other than a going-private transaction, if (i) after the disclosure of the material facts of the transaction a majority of the disinterested directors on the relevant board committee approves the transaction in good faith and without gross negligence (“Board Committee Approval”); or (ii) such transaction is conditional on obtaining Disinterested Shareholder Approval at the time of submission for approval or ratification, and such approval is obtained; or • a controlling shareholder, constituting a going- private transaction, if (i) Board Committee Approval is received; and (ii) Disinterested Shareholder Approval is received. The amendments also limit the scope of the fiduciary duty liability of a controlling shareholder, who can only be liable for damages for: • a breach of the duty of loyalty to the corporation or other shareholders; • acts or omissions not in good faith or involving intentional misconduct or a known violation of the law; or • any transaction from which the person derived an improper personal benefit. Additionally, the amendments modify rules regard- ing shareholder inspections of books and records under Section 220 of the DGCL, including requiring that an inspection demand describe with reasonable particularity the shareholder’s purpose; providing an exhaustive list of the “books and records” available for inspection; and allowing the Court of Chancery to order that a corporation produce specific or additional records if this is necessary and essential to fulfil the shareholder’s purpose.
444 CHAMBERS.COM
Powered by FlippingBook