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Summary: Specific Performance In Acquisitions

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Maria Bocharova

Specific Performance in Acquisitions:
When Monetary Damages Are Not Enough

The rule of thumb in contract remedies is injured party is only entitled to the economic expectation or its equivalent. It is not entitled to the actual performance of the contract. That is why, usually, drafting the provisions regarding the breach of the contract, an attorney will be most focused on the monetary damages as the standard and the most commonly used type of the remedies. Monetary damages are generally awarded as a sum of money equal to the loss in value to the injured party of the other party’s failed or deficient performance, plus any other loss caused by the breach .
However, sometimes non-monetary remedies, such as specific performance, …show more content…

For example, in Triple-A Baseball Club Assocs. v. Ne. Baseball, Inc., 832 F.2d 214, 223-24 (1st Cir. 1987) specific performance awarded because baseball franchise was a unique business; in Rand-Whitney Packaging Corp. v. Robertson Group, Inc., 651 F. Supp. 520, 538 (D. Mass. 1986) specific performance possible where business assets “present a unique opportunity”; in Wooster Republican Printing Co. v. Channel 17, Inc., 533 F. Supp. 601, 621 (W.D. Mo. 1981) specific performance of a contract to sell “unique” television station; in True North Comm’ns, Inc. v. Publicis, S.A., 711 A.2d 34, 37, 44-45 (Del. Ch. 1997), aff’d, 705 A.2d 244 (Del. 1997) awarding specific performance where “international communications company with advertising and public relations agencies…around the world” was “a unique acquisition opportunity”. In other words, in order to assure that specific performance clause is enforceable, it is important to incorporate in the loan agreement the purpose of lending money: acquisition of a “unique asset”. Additionally, the detail description of all the characteristics that make the target company so “unique” in the market, would be very supportive in order to be awarded specific …show more content…

In BT Triple Crown Merger Co. v. Citigroup Global Mkts., Inc., (Sup. Ct. N.Y. County May 7, 2008) “The court would have to weigh the accuracy and credibility of competing fact and expert witnesses trying to estimate the difference in value between the loan package promised by the banks and what a hypothetical alternative financer…might theoretically charge for the similar service – a necessarily complex exercise.” Additionally, the court should also find the way to estimate in monetary amount the lost profits from the acquisition banks refused to finance. In these circumstances, court found that specific performance would “do more perfect and complete justice .” The same decision was granted by the court in Girard Bank v. John Hancock Mut. Life Ins. Co., 524 F. Supp. 884, 896 (E.D. Pa. 1981), aff’d, 688 F.2d 820 (3d Cir. 1982), where specific performance was awarded to the plaintiff because the calculation of damages in the lending arrangement would be “complex and

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