When the Debt Incurred in a Cash Merger Causes the Target to Fail: Protecting Target Directors
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Authors:
Scott J. Davis
William R. Kucera -
Publication Date:
September 2012 -
Report Number:
DN-V4N17-12
Recent high-profile examples demonstrate the potential liability directors may face if they approve a cash merger financed in substantial part through borrowing and the target company fails. This Director Notes describes that risk and reviews steps directors can consider that may help mitigate it.