Disclosure of Disclosure Schedules, Commitment Agreements and Guarantees in Mergers and Acquisitions

摘要

In this comment, the author argues that the federal securities disclosure rules should be amended to generally require public companies to file with the Commission and publicly disclose disclosure schedules to agreements governing mergers and acquisitions. The author contends that such disclosure would provide investors with access to the exceptions to the terms of these agreements so that they can properly assess the representations made and covenants agreed to by the parties as well as the conditions precedent to the parties' respective obligations to consummate the underlying transaction. The author also argues that the disclosure rules should be amended to generally require public companies to immediately file with the Commission and publicly disclose debt and equity commitment agreements and guarantees in mergers and acquisitions. The author contends that such disclosure would provide investors with immediate access to the conditions and limitations set forth in these documents so that they can assess the probability that the financed party will either receive the funds contemplated thereby and consummate the underlying transaction or be able to finance the termination fee and other costs set forth in the transaction agreement.