BARBADOS Law and Practice Contributed by: Debbie Fraser, Joanna M. Austin, Makela Harrison-Yarde and Jael Smith, Fraser Law
10. Litigation 10.1 Frequency of Litigation
11. Activism 11.1 Shareholder Activism
Litigation regarding M&A deals is not frequent in Bar - bados. The most recent M&A cases were Ansa McAL (Barbados) Limited (ANSA) v Banks Holdings Limited (BHL) and Slu Beverages Ltd BB 2016 CA 13 and Ken - neth Went v Cable & Wireless BB 2018 HC 26. For details, please see 8.3 Business Judgment Rule . 10.2 Stage of Deal Actions in the Supreme Court of Barbados regard - ing takeovers have been brought after the offer for the takeover bid has been made and before the offer closes. 10.3 “Broken-Deal” Disputes As a result of the COVID-19 pandemic, the following were identified as key for M&A transactions in Bar - bados: • well-defined materially adverse change clauses in contracts, the importance of which was under - scored by some parties seeking to terminate trans - actions based on unforeseen economic disrup - tions; • the need to have clear force majeure clauses within contracts to determine whether unforeseen events could justify the termination of a contract or rene - gotiations; and • the need for more thorough due diligence, espe - cially as it relates to the financial stability of the target company.
Minority shareholders are becoming increasingly vigi - lant with respect to the protection of their rights and the preservation of the value of their shares. There is limited trading of shares on the BSE, and share reten - tion is therefore important. The general focus of share - holders is to ensure that they are fairly compensated for their shareholding and that the mechanism used to value said shareholding is of an acceptable standard. 11.2 Aims of Activists The firm is not aware of cases of activists encouraging companies to enter into M&A transactions or major divestitures. 11.3 Interference With Completion Activists seek to scrutinise announced transactions and to review whether, for example, the directors are compliant with their obligations under the Take-Over Code to alert minority shareholders to their rights and ensure fair treatment. The firm has not seen cases where activists who are not shareholders have sought to interfere by way of court proceedings, etc, with an announced transaction. Any such attempt would require the activists to convince the court that they have a cause of action to pursue.
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