Akorn, Inc. v. Fresenius Kabi AG, et al.

Paul Weiss and Sidley advised Fresenius and Cravath advised Akorn on the dispute.

Delaware Court of Chancery ruled that Fresenius was justified in canceling its $4.75 billion acquisition of specialty generics pharmaceutical manufacturer Akorn, Inc. The ruling is the first-ever affirmation of the termination of a merger agreement in a Delaware court based on a “Material Adverse Effect” (MAE).

After entering into the merger agreement with Akorn, Fresenius received anonymous letters alleging data integrity issues involving several products at various facilities. Vice Chancellor J. Travis Laster found that Akorn effectively did nothing to investigate the allegations.

The court upheld Fresenius’s termination of the merger agreement: “Fresenius’s investigation uncovered serious and pervasive data integrity problems that rendered Akorn’s representations about its regulatory compliance sufficiently inaccurate that the deviation between Akorn’s actual condition and its as-represented condition would reasonably be expected to result in a Material Adverse Effect.”

Paul Weiss advised Fresenius with a team including Stephen P.
Lamb (Picture), Daniel A. Mason, Brendan W. Sullivan, Lewis R. Clayton, Andrew G. Gordon, Susanna M. Buergel, Jonathan H. Hurwitz, Daniel H. Levi and Paul A. Paterson.

The Sidley investigative team, comprising lawyers from the firm’s Food, Drug and Medical Device Compliance and Enforcement practice, was led by partners Nathan Sheers, Jeffrey Senger, and Allison Fulton in Washington, D.C., and associates Hilary Hoffman in New York, and Marina Romani and Faraz Siddiqui in Washington, D.C. The investigative team was supported by Sidley’s litigation group as the matter proceeded to trial. The Litigation team was led by Robert Keeling and included Kyle Fiet, Kristen Knapp, Ray Mangum, Ava Guo, Michael Buschbacher, Matt Letten, Jen Rathmell, and Heather Irwin, all in Washington, D.C. or New York.

Cravath advised Akorn with a team including Robert H. Baron, Daniel Slifkin, Michael A. Paskin and Justin C. Clarke.
 

Involved fees earner: Stephen Lamb – Paul Weiss Rifkind Wharton & Garrison; Daniel Mason – Paul Weiss Rifkind Wharton & Garrison; Brendan Sullivan – Paul Weiss Rifkind Wharton & Garrison; Lewis Clayton – Paul Weiss Rifkind Wharton & Garrison; Andrew Gordon – Paul Weiss Rifkind Wharton & Garrison; Susanna Buergel – Paul Weiss Rifkind Wharton & Garrison; Jonathan Hurwitz – Paul Weiss Rifkind Wharton & Garrison; Daniel Levi – Paul Weiss Rifkind Wharton & Garrison; Paul Paterson – Paul Weiss Rifkind Wharton & Garrison; Robert Baron – Cravath Swaine & Moore; Daniel Slifkin – Cravath Swaine & Moore; Michael Paskin – Cravath Swaine & Moore; Justin Clarke – Cravath Swaine & Moore; Nathan Sheers – Sidley Austin LLP; Jeffrey Senger – Sidley Austin LLP; Allison Fulton – Sidley Austin LLP; Hilary Hoffman – Sidley Austin LLP; Marina Romani – Sidley Austin LLP; Faraz Siddiqui – Sidley Austin LLP; William Sarraille – Sidley Austin LLP; Trevor Wear – Sidley Austin LLP; Robert Keeling – Sidley Austin LLP; Kyle Fiet – Sidley Austin LLP; Kristen Knapp – Sidley Austin LLP; Ray Mangum – Sidley Austin LLP; Ava Guo – Sidley Austin LLP; Michael Buschbacher – Sidley Austin LLP; Matthew Letten – Sidley Austin LLP; Jennifer Cormack Rathmell – Sidley Austin LLP; Heather Irwin – Sidley Austin LLP;

Law Firms: Paul Weiss Rifkind Wharton & Garrison; Cravath Swaine & Moore; Sidley Austin LLP;

Clients: Fresenius SE & Co KGaA; Akorn Inc.;