Danyll Foix Article Explains Why "Failing Firm" Defense Could Not Save Waste Companies' Deal

Articles / August 22, 2017

Partner Danyll Foix authored an analysis published by Law360 on July 19, 2017. The article, “The ‘Failing Firm’ Defense: Pointers from a Blocked Deal,” offers insight into the failed deal between EnergySolutions and Waste Control Specialists. A federal judge ruled that the terms of the acquisition agreement precluded the parties from relying on the “failing firm” defense to save the deal from being blocked on antitrust grounds.

Foix’s article discusses the deal and the “failed firm” arguments, and concludes:

“The blocked EnergySolutions/WCS merger provides a few pointers for parties considering acquisitions that are likely to draw scrutiny from antitrust enforcers. Most obviously, parties that anticipate relying on a failing firm defense should avoid transaction provisions that hinder a thorough, good-faith process for identifying potential buyers. This does not mean that parties cannot agree to exclusive negotiation, or no-talk, terms. Rather, such terms may be adopted after completing a process that confirms the lack of reasonable alternative buyers for a failing firm. And if that is not possible, the parties still may be able to prove there were no alternative buyers through post-transaction evidence or cooperation with the enforcers.”

Read the article (registration required).


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