Last week, the Delaware Chancery Court decided the Panera case.* While awarding deal price, the Court also decided a question involving prepayment – and whether there can be refunds – for the first time. The Court decided that, based on the statutory text, refunds of prepayment are not allowed. In other words: when a company prepays a portion of, or all of, the merger consideration, those funds are not subject to clawback no matter what the Court were to rule on fair value.
For more, see this post on deallawyers.com. We will update commentary on Panera in the future.
*RKS attorneys serve as counsel for petitioners in Panera.