DENMARK Trends and Developments Contributed by: Thomas Weitemeyer and Jonas Høst, Moalem Weitemeyer
heavy analysis aimed at reconstructing what would likely have happened had the breach not occurred, and requires careful records of post-closing decisions and assumptions. Disputes also frequently focus on how the financial impact should be measured, including whether loss should be assessed by reference to a reduction in the target’s overall value, the cost of remedying the issue, or a combination of both; and whether the chosen approach reliably isolates the effect of the breach from other post-closing developments. Deal implication: buyers increasingly need a post- closing “claims readiness” plan A notable practical development is that sophisticated buyers are increasingly treating post-closing claims readiness as an operational and negotiated work - stream rather than a purely legal afterthought. W&I claims often arise late in the policy period, and the rel - evant documents are frequently historical and held by individuals who are no longer involved in the business. Against this backdrop, buyers increasingly seek to ensure that: • the data room is properly preserved, including Q&A logs, minutes from Q&A calls, disclosure sched - ules, etc; • internal deal materials (such as due diligence reports, investment committee papers, financial models, etc) are retained in a manner that allows later reconstruction of knowledge, reliance and decision-making; and • the buyer has both contractual rights and practical ability to access target documentation post-closing – especially if management changes shortly after completion. This trend mirrors the broader front-loading and pro - cess discipline seen in sophisticated arbitration prac - tice in the Nordics: disputes are increasingly won or lost on the quality of the early documentary record and the ability to present it coherently. Practical takeaway In Danish M&A deals, W&I insurance should be seen not just as a way to shift risk to an insurer, but as
something that needs to be planned and managed carefully from the start. The way information is dis - closed in the SPA, the detailed terms of the insur - ance policy, and the buyer’s plan for retaining and accessing relevant documents after closing all need to fit together. The buyer should consider potential breaches of the seller’s warranties relatively soon after closing, while key people, records and correspond - ence are still available. This will ensure the best pos - sible basis for gathering evidence and submitting a well-supported claim under the W&I policy. If they do not, the buyer may end up spending significant time and money on a claim that fails simply because the necessary documentation cannot be produced, even if the buyer is right on the substance. A second notable trend in Danish M&A disputes is the buyer’s increasing willingness – particularly in conten - tious situations – to test avenues outside the SPA’s agreed dispute resolution framework. Most common - ly, this takes the form of direct claims against indi - viduals in the target’s management or board, alleging loss suffered as part of the transaction process. This type of “side litigation” is often pursued alongside (or instead of) arbitration under the SPA and can result in parallel proceedings, reduced confidentiality, and public court scrutiny of what would otherwise be a confidential commercial dispute. Bypassing SPA Arbitration Through “Side Litigation” Against Target Management From the buyer’s perspective, side litigation is often driven by a combination of perceived advantages: • Court proceedings may be seen – rightly or wrongly – as offering broader tools for obtaining evidence, securing interim measures, or involving third parties that would not be bound by an arbitra - tion agreement. • Public court proceedings can create reputational pressure and negotiation leverage that confidential arbitration is designed to avoid, particularly where individuals face the risk of personal liability. • Side litigation can be used to increase indirect pressure on the seller by forcing management and/ or board members to produce documents or give evidence that may later support, or be used to strengthen, claims against the seller under the SPA.
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