M&A and Private Equity Litigation

CORPORATE  LITIGATION (EQUITY AND M&A)

Our team has recognized expertise in corporate litigation (post-acquisition disputes), governance disputes (shareholder disputes and liability of directors and officers), as well as in the resolution of corporate difficulties.

Acquisition litigation (“equity”/M&A):

The acquisition of commercial companies and businesses entails multiple risks for those involved during the negotiation and performance phases of the acquisition contract and the ancillary agreements that may accompany it (assets and liabilities guarantee, earn-out, agreements on intellectual property rights, commercial contracts, non-competition commitments, etc.).

We thus assist our clients in their pre- or post-acquisition disputes, particularly in matters of:

• Abusive breach of negotiations
• Implementation or defense to the implementation of an assets and liabilities guarantee
• Valuation of the price of shares by an expert (article 1843-4 of the French Civil Code)
• Implementation of the seller’s liability in case of a vitiated consent (fraud, mistake, etc.)
• Management of disputes arising from the transfer of contracts by way of acquisition (partners, suppliers and customers)
• Adjustment of the price after acquisition (“earn-out”)

Shareholder and governance conflicts:

Due to the heterogeneity of their interests or their entrepreneurial or patrimonial strategies, shareholders and managers are bound to oppose or clash, all the more so when the interests that had brought them together drift away over time.

These conflicts are the most complex to resolve as they require psychology, creativity, mastery of the governance rules and the ability to work in collaborative mode with other partners in the company.

We regularly intervene with managers or shareholders in the settlement of disputes that may arise from:

• the performance or non-eperformance of the shareholders’ agreement (implementation of approval, pre-emption, tag along or drag along clauses, non-competition, blocked vote, etc.)
• the imbalance in the relationship between majority and minority shareholders (abuse of majority or minority rights, shareholder activism)
• the company’s corporate life (convening and holding of general meetings and boards of directors, compliance with majority rules)
• the conclusion and performance of regulated agreements
• the exclusion or withdrawal of a shareholder (implementation of exclusion clauses, determination of the value of the shares)
• the removal from office of a corporate officer

Liability of directors and company officers:

Corporate officers are exposed to extensive civil and criminal liability when they are required to perform their duties in accordance with the company’s “constitution” (articles of association and shareholders‘ agreements), the scope of the mandate and mission entrusted to them by the shareholders, and increasingly complex laws and regulations.

Our team is regularly consulted in the definition, optimization, and implementation of a risk management strategy for the director (risk mapping and delegation of authority), as well as in the support of the director or the company in terms of:

• implementation by the company, shareholders or third parties of the civil contractual or tortious liability of the de jure or de facto director, in case of a breach of the articles of association, mismanagement or misuse of his powers and of the company’s assets
• defense of the de facto or de jure director in the context of collective proceedings (liability for insufficient assets)
• criminal defense of the director and the company (liabilities and sanctions of Book VI of the French Commercial Code)

Difficulties faced by businesses:

Our team assists its clients in defending their interests when faced with the default of their customers, partners or suppliers, whether it is a matter of filing their claims or ensuring the recognition of their property rights (actions for the recovery of property) or contractual rights with respect to the bodies of the collective procedure.

Outside of the litigation phase, we work alongside the other teams of the during the conciliation, ad hoc mandate or amicable settlement phases as part of the mechanisms for preventing business difficulties.

Typical missions:

• expert appraisal procedure to determine the value of shares sold in the context of a forced sale of shares following the termination of a corporate office
• liability action against a former director following the purchase of his shares and the discovery of a misappropriation of assets
• defense of minority shareholders by placing the company under provisional administration, holding the auditor liable and filing a criminal complaint against the director (Ponzi scheme)
• contesting the removal from office of a Chief Executive Officer and action for compensation for his loss and exercise of the option to sell his shares
• judicial escrow (séquestre) of company shares in the context of a conflict between partners related to the application of a “good/bad leaver” clause
• defense of a health operator (breach of contractual commitments) in the implementation of a public-private partnership for the creation of a health and medico-social center
• defense of a healthcare cooperation consortium facing claims of one of its members (mismanagement, removal from office of a director and a co-manager, claims for the nullity of general meetings, removal from office of a co-manager of the company, etc.)
• minority expertise in the context of a conflict between partners