M&A statutes of limitations: Delaware moves to vanquish a legal relic
By Ed Batts
In a world of continuous innovation, it is an understatement that to varying degrees the law lags behind the times. But even measured by the glacial pace of judicial and statutory change, the notion of a corporate ‘seal’ — the physical symbol of a corporate ‘person’, evoking images of dripping wax and flickering candles in a bygone colonial setting — is dated.
The importance of the corporate seal has been the rage recently with Delaware decisions, among them the November 2013 holding in ENI Holdings LLC v KBR Group Holdings LLC, that have decreed Delaware’s normal statute of limitation was… an actual statute of limitations.
The Delaware statute of limitations for contract-type claims is either three years (general contracts) or four years (UCC claims). Yet the statute of limitations for the Internal Revenue Service (IRS) to assert tax recovery claims on things such as payroll taxes or ERISA claims well exceeds these Delaware periods. Accordingly, a buyer could be left in the position of being liable to the IRS for successor tax liability from the purchase of a target, say five years post closing, but be unable to recover in turn from a seller since the statute of limitations would have expired…
Click on the link below to read the rest of the DLA Piper briefing.
News from DLA Piper
News from The Lawyer
Briefings from DLA Piper
On 22 July 2014, a new law amending the Law on Data Protection and Law on Information was signed off by the Russian president and thus was officially adopted.
The Association of Southeast Asian Nations (ASEAN) was established on 8 August 1967 under the framework of the ‘three pillars’ of regional co-operation
Analysis from The Lawyer
Shearman & Sterling is making its presence felt in the City, squaring up to magic circle firms and looking to muscle in on key relationships. Private equity house Bridgepoint is one outfit that has had its head turned by the US firm.
A new breed of lawyer is smoothing the path for companies entering emerging or unstable jurisdictions