IRELAND Law and Practice Contributed by: Leonora Malone, John Olden, John Darmody and Doreen Mescal, Addleshaw Goddard
10. Litigation 10.1 Frequency of Litigation
themselves from decisions if there is a con - flict. • Obtaining Shareholder Approval: Some defensive measures, such as issuing new shares or blocking a bid, require shareholder consent. • Exercising Care, Skill and Diligence: Direc - tors must carefully evaluate the defensive measure, consult advisers, and ensure it complies with legal and regulatory require - ments. • Compliance With the Takeover Rules: Any defensive actions must not frustrate an offer without proper shareholder approval or con - sent from the Takeover Panel. • Considering the Company’s Interests: Directors must also consider the company’s long-term health, including the interests of employees and creditors. • Disclosure: Full and transparent disclosure of defensive actions and their rationale must be provided to shareholders and the Takeover Panel. 9.5 Directors’ Ability to “Just Say No” Directors must act in the best interests of the company and its stakeholders. While they can - not block a business combination without rea - son, they can take action if it aligns with the company’s interests. This requires: • consulting independent experts as per the Takeover Rules; • acting in good faith with a belief that their actions benefit the company; and • exercising due diligence in considering the offer.
In Ireland, litigation relating to M&A deals is rela - tively rare. When it occurs, it typically involves the enforcement of provisions in the transaction documents, such as warranties or indemnities. 10.2 Stage of Deal Litigation in M&A deals in Ireland is most com - monly brought after the completion of the trans - action, typically when issues arise regarding the enforcement of warranties, indemnities or other contractual obligations. However, disputes can also occur during the negotiation phase, par - ticularly if there are disagreements over terms or conditions in the deal. 10.3 “Broken-Deal” Disputes The COVID-19 pandemic highlighted the importance of clearly defined “material adverse change” (MAC) clauses in M&A agreements. Many deals in early 2020 were affected by unforeseen circumstances, leading to disputes regarding whether the pandemic triggered these clauses. One key lesson is the need for careful drafting of MAC provisions to account for exter - nal events such as pandemics and the impor - tance of considering flexibility in deal structures, such as including termination rights and renego - tiation mechanisms in the event of major market disruptions.
11. Activism 11.1 Shareholder Activism
Shareholder activism is an emerging force in Ire - land, driven by both domestic and international investors. Activists often focus on influencing governance, financial structures and corporate
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