LVMH: files countersuit in Delaware Court
(CercleFinance.com) - On Monday evening; LVMH filed its conclusions with the Delaware Court of Justice in its litigation against Tiffany.
In its conclusions, the group states that the agreement signed in November 2019 contains a clause authorising the parties to waive completion of the transaction in the event of a material adverse event, provided that the event invoked under this clause has not been explicitly excluded by the parties.
LVMH said, "The notable absence of a pandemic carveout in the definition of a Material Adverse Effect in the Tiffany Merger Agreement is clear".
"The pandemic, whose effects are devastating and lasting on Tiffany, has irrefutably caused a Material Adverse Effect". This clause alone would be enough to prevent the closing".
LVMH believes that Tiffany's mismanagement constitutes a blatant breach of its obligation to operate in the ordinary course. "For instance, Tiffany paid the highest possible dividends while the company was burning cash and reporting losses".
The Group also indicates that the letter signed by the Minister of Europe and Foreign Affairs in France makes it impossible to complete the acquisition of Tiffany before the deadline set out in the contract.
Finally, LVMH confirms that it has fulfilled all of its obligations under the contract and demonstrates that it has made "reasonable best efforts" to obtain all of the necessary regulatory approvals.
Copyright (c) 2020 CercleFinance.com. All rights reserved.
In its conclusions, the group states that the agreement signed in November 2019 contains a clause authorising the parties to waive completion of the transaction in the event of a material adverse event, provided that the event invoked under this clause has not been explicitly excluded by the parties.
LVMH said, "The notable absence of a pandemic carveout in the definition of a Material Adverse Effect in the Tiffany Merger Agreement is clear".
"The pandemic, whose effects are devastating and lasting on Tiffany, has irrefutably caused a Material Adverse Effect". This clause alone would be enough to prevent the closing".
LVMH believes that Tiffany's mismanagement constitutes a blatant breach of its obligation to operate in the ordinary course. "For instance, Tiffany paid the highest possible dividends while the company was burning cash and reporting losses".
The Group also indicates that the letter signed by the Minister of Europe and Foreign Affairs in France makes it impossible to complete the acquisition of Tiffany before the deadline set out in the contract.
Finally, LVMH confirms that it has fulfilled all of its obligations under the contract and demonstrates that it has made "reasonable best efforts" to obtain all of the necessary regulatory approvals.
Copyright (c) 2020 CercleFinance.com. All rights reserved.