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MACs – Some Observations
October 31, 2007 Full PDF
As credit markets continue to be roiled by the subprime mortgage crisis and the illiquidity of highly leveraged loans, buyers in some high profile M&A transactions have claimed the right to exit deals based on the assertion of a "material adverse change" or "MAC" in the target's business. This memo discusses some of the reasons driving these MAC assertions and highlights some issues to consider when drafting a MAC and more generally, a merger agreement.