Broken Deal For United Rentals
In the summer of 2007, Cerberus agreed to buy United Rentals, the world's largest equipment rental company that was traded on the NYSE. After the credit markets began to tighten in August, Cerberus decided not to move forward with the acquisition and agreed to pay United Rentals the $100 million “reverse termination fee” the parties had previously negotiated and included in their deal agreement. United Rentals sued in the Delaware Court of Chancery for specific performance (i.e., a court mandate that Cerberus complete the deal). Cerberus cited the clear language contained in the deal agreement that capped its liability for not completing the transaction at $100 million. After a two-day trial, Delaware Chancellor William B. Chandler, III ruled in favor of Cerberus, writing in his ruling that “URI knew or should have known what Cerberus’ understanding of the merger agreement was.” In a statement, Cerberus said it was “gratified” by the court’s ruling and was “pleased that the court chose to decide the case on the merits and confirm that Cerberus acted in accordance with its rights and obligations.”
Read more about this topic: Cerberus Capital Management
Famous quotes containing the words broken, deal and/or united:
“The path of social advancement is, and must be, strewn with broken friendships.”
—H.G. (Herbert George)
“The so-called Transcendentalists are not the only people who deal in Transcendentals. On the contrary, we seem to see that the Utilitarians,—the every-day world’s people themselves, far transcend those inferior Transcendentalists by their own incomprehensible worldly maxims.”
—Herman Melville (1819–1891)
“In one notable instance, where the United States Army and a hundred years of persuasion failed, a highway has succeeded. The Seminole Indians surrendered to the Tamiami Trail. From the Everglades the remnants of this race emerged, soon after the trail was built, to set up their palm-thatched villages along the road and to hoist tribal flags as a lure to passing motorists.”
—For the State of Florida, U.S. public relief program (1935-1943)