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:
“As a lone ant from a broken ant-hill
from the wreckage of Europe, ego scriptor.”
—Ezra Pound (1885–1972)
“There is a great deal of unmapped country within us which would have to be taken into account in an explanation of our gusts and storms.”
—George Eliot [Mary Ann (or Marian)
“What the United States does best is to understand itself. What it does worst is understand others.”
—Carlos Fuentes (b. 1928)