Interesting new opinion just dropped from VC Laster diving into the tempestuous border between immutable fiduciary duties and Delaware’s commitment to contractarian governance. 1/n Here's the skinny: A struggling startup with several VC backers needs more capital, but the incumbents aren’t interested in re-upping. So a new investor is smoked out who’s willing to kick in, but who conditions his investment on cleaning up the capital structure in two ways: 2/n

A few commentators convinced me I could offer a few general reax to this ongoing crypto crisis without getting into the specifics of the FTX/SBF case (where, as previously noted, I’m going to withhold editorializing). So I figured I’d give it a shot FWIW. 1/ This is at least the 4th significant burst “asset bubble” of my adult life. (a) algo-trading bubble of 1987; (b) the Dot.com bubble of 2001; (c) the securitization bubble of 2008; and now (d) the crypto-bubble of 2022. (And no I wasn’t around for crash of ’29!) 2/

A few thoughts on the Twitter byout debt, as original underwriting banks attempt to syndicate out debt (reportedly) at 60% of par. 1/ bloomberg.com/news/articles/… Warning of possible bankruptcy may be a savvy move by Musk if he is contemplating purchasing the debt himself (or a good chunk of it), directly or through Twitter. IMO he’s not misstating things to say that bankruptcy is a possibility under the status quo ante. 2/

Now that it’s over(?), here are my 10 takeaways from the TWTR-Musk saga: 1/11 1.The merger dispute was never that hard of a case. No novel legal interpretations came out of it, and it settled in a manner befitting its merits. Oliver Wendell Holmes once famously quipped, “Hard cases make bad law”. This easy case made (more or less) no law.

@ProfRobAnderson offers up a pithily written paper arguing SP is not ineluctable even if Musk found in breach. I agree w/ that general point (even if Rob & I possibly disagree about what relative point estimates to put on SP, $1b, $2b & YOLO Expectation damages.) A Good Read!👇

https://twitter.com/ProfRobAnderson/status/1571863003406172172

A key point concerns the "prevention" doctrine, which CM used in Decopac to disregard a financing failure engineered by the buyer in order to trigger an escape hatch on SP. Rob argues that prevention applies only to "conditions", not "remedies" (under his reading of the Rtmt 2d).

@chancery_daily has badgered me into offering up an argument why $TWTR might be able to get (uncapped) expectation damages – rather than capped $1b damages – if SP is not granted & musk found in breach. I’ll oblige, but with understanding that this is a long shot argument

https://twitter.com/chancery_daily/status/1568011580876668928

The key damages provision that needs to be interpreted here is 8.3(c)(ii), which reads (in relevant part):

Second Circuit just reversed the Citibank/Revlon mistaken payment opinion from SDNY! Opinion by Judge Leval (not surprising, since he's the contracts guru of the 2nd circuit

Twitter, Elon, Revlon duties and settlement: Following up on my earlier 🧵 on settlement: suppose TWTR negotiates a settlement with Musk that involves a repriced deal (say at $40 / share) and the deal closes....

https://twitter.com/ProfEricTalley/status/1546910997956345856

Twitter SHs would probably sue, alleging a Revlon violation and claiming that the Board did not undertake reasonable efforts to protect the $54.20 price already negotiated. How should the board respond? One (boring) way is to fight it, of course….

Well at long last here's the complaint. (Poor @akjennings has been sitting up in his jammies for 36 hours reloading a docket page, so props to you, amigo!)

https://twitter.com/akjennings/status/1546963585288519680

Not many surprises--nor should there be, since so much of this deal was done, ironically, over Twitter. The plaintiffs have asked for Specific Performance (no surprise), &complaint details various allegations of disparagement by Musk, the (un)reasonability of his info requests...

🧵on what's next in the TWTR/Musk saga. With the letter from TWTR, both sides have gone full “pufferfish,” proclaiming their own righteousness & their counterpart’s perfidy. Unsurprising–that's what lawyers *do* publicly. Privately, tho, they're assessing outcomes & likelihoods… If this goes all the way to trial (more below), most think 1 of 3 outcomes could follow: (a) Musk proves TWTR misbehaved and walks away; (b) TWTR shows Musk breached & gets Specific Performance; and (c) same as (b) but TWTR confined to $ damages (likely capped at $1b per DMA).

Get ready -- this missive from Wachtell is short, but pretty clear... sec.gov/Archives/edgar… This portends a complaint within 48 hours, I'd guess (with one last ditch attempt to reach a settlement).

I'm live-tweeting the oral argument in the 2nd Circuit of Citibank, N.A. v. Brigade Capital, 21-487-cv, set to kick off at 10am (EDT) today. It is third up for argument, so based on the court’s schedule, I don’t expect to go “truly” live until around 10:40 or so. Casual observers might recall that case involved a nearly $1 billion mistaken payment made by Citibank to Revlon creditors, via a “fat finger” clerical error. Several creditors refused to return cash (since they were getting ready to sue Revlon/Citibank for that amount anyway).