We received a request recently from a Deal Notes® subscriber to address a topic that has been an issue for him on many occasions. This subscriber is the head of a large A&D company; during his career, he has been directly involved in acquisitions and sales of numerous A&D companies. The topic is: venue in NDAs and Purchase Agreements.

In one of our first Deal Notes®, number 004, published in February 2022, we discuss the importance of sellers having experienced M&A legal counsel. As all qualified M&A attorneys know, in the unlikely event of litigation between a buyer and seller, the two best venues, for both parties, are Delaware and New York. 

Delaware and New York are the best venues for both parties in M&A litigation because of: i) the vast amount of M&A litigation that these courts have processed over the past 100+ years, and ii) their widely held respect among attorneys (representing buyers and sellers) for being the most knowledgeable, impartial, and efficient courts for this kind of complex financial litigation, relative to the court systems of all other venues in the United States.

Our subscriber, who asked us to address this topic, recounted numerous M&A transactions where the other party had legal counsel who did not have sufficient M&A experience and demanded other state venues that were a poor choice for both parties. In some contracts, a home venue can provide some advantages to a party. As a qualified M&A attorney will tell you, a home venue is not necessarily a favorable provision for you in an NDA or Purchase Agreement. Furthermore, demanding a home venue, versus Delaware or New York, signals to the other side that you and your attorney do not have experience in M&A, which is highly undesirable from a negotiating perspective.

As we stated in Deal Note® 004, if you are going to sell your middle market aerospace & defense company, first, retain highly qualified M&A counsel. We are confident that they will advise you that Delaware and New York are excellent venues for choice of law for both your NDA and your Purchase Agreement. 

Have a great day everyone,

Bill Alderman
Founding Partner