Little precedent in Tribune case, Senior Associate Dean Afsharipour tells Bloomberg Law

There is little legal precedent for Tribune Media Co.’s assertions that Sinclair Broadcast Group’s “willful” breaches of its written merger agreement caused the deal to implode, Senior Associate Dean for Academic Affairs Afra Afsharipour told Bloomberg Law.

Tribune called off the $3.9 million merger Aug. 9, the same day it filed a complaint against Sinclair in Delaware Chancery Court. Sinclair failed to show “reasonable best efforts” to “avoid or eliminate” government roadblocks to completing the merger, Tribune alleges.

The courts “haven’t said much” about violations of best-effort standards, Afsharipour told Bloomberg Law.

Phrases such as “reasonable efforts,” “commercially reasonable efforts,” and “reasonable best efforts” often appear in merger contracts, the Bloomberg story points out, but lawyers and judges interpret them differently.

“Lawyers tend to think that you’re essentially obligating parties to a higher level of effort depending on the way the phrasing is constructed,” Afsharipour said. “And ‘reasonable best effort’ tends to be a higher standard among practitioners. But there’s no actual agreement in the case law that says that.”

Senior Associate Dean Afsharipour’s areas of research include comparative corporate law and governance, mergers and acquisitions, and transactional law. Her scholarship has appeared in numerous law reviews, including the Columbia Law Review, the Minnesota Law Review, the Vanderbilt Law Review, and the UC Davis Law Review.