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Precluding Pre-Merger Communications in Post-Merger Dispute

June 12, 2019

In Shareholder Representative Services LLC v. RSI Holdco, LLC, C.A. No. 2018-0517-KSJM (Del. Ch. May 29, 2019), the Delaware Court of Chancery upheld a provision in a private-company merger agreement precluding a buyer from using the seller’s privileged emails against the seller in post-closing litigation. Following the guidance from the decision in Great Hill Equity Partners IV, LP v. SIG Growth Equity Fund I, LLLP, 80 A.3d 155 (Del. Ch. 2013), the RSI Court held that under the terms of the parties’ merger agreement, pre-merger communications between the target company’s owners and representatives and the target company’s counsel could not be used by the buyer in a post-closing dispute.

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Read the full article from The Harvard Law School Forum on Corporate Governance and Financial Regulation