MMM Partner Stephen Vaughn was quoted in a recent Bloomberg Law article by Jennifer Kay titled “Musk, Corporate Power Debates at Delaware’s Top Court: Explained.” The article covers several significant matters before the Delaware Supreme Court, including a $1 billion earnout dispute involving Johnson & Johnson.
In discussing the implications of the Johnson & Johnson case, Vaughn offered key guidance on how parties can mitigate litigation risk for future M&A transactions. He emphasized the importance of clearly defining performance expectations in earnout provisions, specifically by aligning buyer obligations with the seller’s business plan rather than relying on vague “commercially reasonable efforts” standards. Vaughn’s analysis underscores how tailored deal terms and precise contractual language are essential in avoiding costly post-closing disputes.
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