Client Alerts

Private Company Deal Alert: Fraud Disclaimers, “Threatened” Claims and Sandbagging in Delaware

In the last quarter of 2015, the Delaware courts issued three opinions and one oral ruling of importance to practitioners advising on private company transactions. Two of the opinions provide insight into the treatment of fraud claims in the acquisition context under Delaware law, especially the element of reliance, and how to successfully disclaim reliance on representations outside the acquisition agreement. The most recent opinion provides guidance on the meaning of “threatened” claims, a concept used in many indemnity provisions. Finally, the oral transcript ruling confirms the permissibility of “sandbagging” under Delaware law.

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