April 1, 2013

Delaware Decision Should Clarify Novation Requirements

Arnold & Porter Advisory

"Do we need a novation?" That is the question invariably asked by the buyer when acquiring a government contractor. Relying on well-established Delaware case law governing acquisitions by stock purchase, a February 22, 2013 Delaware Chancery Court decision, Meso Scale Diagnostics v. Roche Diagnostics, held that a reverse triangular merger did not affect an assignment, by operation of law or otherwise, of the target's contractual rights.

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