I read all the reviews and took up someone&226 s suggestion about using an extra pound of cheese.A folk proverb from the American West teaches that the most important ingredient of a successful rain dance is timing. It makes a ton of mac and cheese that will be more than enough for days. However, I love homemade macaroni and cheese and I wanted to make some for our neighborhood block party.
![]() ![]() Huntsman Cheese And Cheese Mac And CheeseBut most “legacy” transactions – signed before the coronavirus threat exploded – are far more opaque. This recipe is cheap and tasty.Some very recent deals – such as Morgan Stanley’s acquisition of E*Trade ( announced on February 20) – explicitly account for COVID-19 through their MAC/MAE, typically deeming it not to constitute a force majeure. Fancy, designer mac and cheese often costs forty or fifty dollars to prepare when you have so many exotic and expensive cheeses, but they arent always the best tasting. Like many MAC/MAEs, the carve outs are far more numerous, and they include: The negative terms represent the holes in the cheese, and they specify carve outs or exceptions to the affirmative provisions. Included are contingencies that would materially affect the “business, condition (financial or otherwise), properties, assets, liabilities (contingent or otherwise), business operations or results of operations of Tiffany and its subsidiaries, taken as a whole.” Also included are contingencies that “would reasonably be expected to prevent, materially delay or materially impair” the closing of the deal. The affirmative terms represent the cheese, and they lay out situations that would allow LVMH to walk away. Our Mac and Cheese is rich and creamy, made from an old fashioned recipe. The MAC/MAE in that deal is representative, featuring both affirmative and negative provisos that can be thought of metaphorically as something akin to a slice of Swiss cheese:Featuring Barbers Cheddar, Huntsman, Cranberry Stilton, and Cotswold Cheeses. geopolitical conditions, including the outbreak or escalation of hostilities, acts of war, sabotage, terrorism or changes in the market price or trading volume of Tiffany’s securities or credit ratings general economic or political conditions in any country where Tiffany operates (including China) Ram for mac mini late 2012The combined volume of the deals is $7.5 trillion. To get a handle on this question, we deployed some tools of machine learning and natural language processing, an approach that has already been shown to be helpful in studying MAC/MAE provisions as well as other business contracts.We make use of a turnkey-ready data set that we previously collected and cleaned, consisting of 1128 MAC/MAE provisions and meta-information associated with the deals (all drawn from FactSet). This deal may thus fall into a relatively difficult and far grayer (if not Gruyère) zone.And that prompts the question of whether the language of MAC/MAE provisions in the aggregate might be used to unwind signed deals in the face of a pandemic. Although many of the items enumerated in the affirmative provisions may well be captured by the COVID-19 outbreak, several exclusions could touch on it as well. It seems likely that colorable arguments might be made on both sides. ![]() A typical example of an explicit pandemic-like provision is the private equity acquisition of the telecom company ComScope in 2010. Consequently, such provisions (when included) would appear to push pandemic-related risks onto the buyer (and away from the seller). Of the remaining 40 percent that arguably address COVID-19, the trigger usually comes through the broad, catch-all provisions (31.6 percent) rather than through an explicit phrase related to pandemics (8.3 percent).And, when a MAC/MAE provision does feature language bearing on a pandemic via either explicit or general terms, it invariably enters through a carve out to the MAC/MAE (the holes in the cheese) rather than through an affirmative provision. For targets that are especially susceptible to pandemic risks relative to others in the industry, then, the “disproportional effects” carve-in would shift risk right back to the seller.A second pressing question is whether the more general language carving out acts of god and force majeure events from the MAC/MAE definition should be read to apply to COVID-19 in the first place. This tendency towards carve-ins for disproportional effects, moreover, appears to hold even when the carve-out uses more general provisions (right-hand panel), focusing on broad act of god contingencies (rather than pandemics in particular).The upshot of this observation is that, for most deals, the question of whether COVID-19 triggers the MAC/MAE clause may turn further on a finely-grained analysis of how the pandemic has affected a company vis-à-vis its peers.
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