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Delaware Supreme Court Reverses Mandatory Injunction Issued by Court of Chancery; Addresses Revlon Duties and Third-Party Contract Rights

In an important ruling addressing the scope of Revlon duties and the Delaware courts’ reluctance to “blue pencil” contractual provisions, C&J Energy Services, Inc. v. City of Miami General Employees’ and Sanitation Employees’ Retirement Trust, the Delaware Supreme Court has reversed a mandatory injunction order issued by the Court of Chancery that (i) required a target to “go-shop” itself (notwithstanding the merger agreement’s “no-shop” provision), and (ii) declared, in advance, that the Court-ordered “go shop” would not constitute a breach of the merger agreement.

Click here to download the Morris Nichols analysis of the opinion.

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