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Huntsman Corp. wins case

I wouldn't be too euphoric Peter. You could possibly have 3 more rounds of court battles before Apollo is required to consummate the deal. Somehow I don't think Apollo is going to let this one go.

Excellent observations, Anonymous--as always. I don't know how you have time to comment on so many articles.

I'd like to raise a basic question. Why can't Apollo/Hexion back out? If I'm negotiating to buy something, then change my mind, I have the right to do so. Why should it be different for a corporation? What law says they cannot? This should have been explained in the article.

Because Apollo/Hexion signed a legally binding series of contracts, that's why. Negotiating is one thing; signing a deal and then walking away is another, and it's illegal, especially so when your actions hurt others, as Apollo's has the Huntsman shareholders.

Bob, you can back out until you sign the deal and then you're committed. Apollo signed the deal, then reneged. This is like you agreeing to buy a car from a private party, signing a written contract and then backing out. Breach of Contract whether individual or corporation.

Because they signed a contract.

To answer Bob's question: an agreement becomes legally enforceable when several factors are met (an offer, acceptance of such offer, consideration and no defenses, such as fraud or misrepresentation). When a person is merely negotiating a deal, such negotiations are generally regarded by the law as �invitations to make an offer.� However, once a formal offer is made (there are a lot of rules that describe what constitutes a formal offer) and it is accepted, it becomes a contract. Typically in corporate purchases, an offer and acceptance is stated very clearly. Once that happens, the only defense is to argue that the other party lied or otherwise withheld relevant information. Since the agreement in this case was to actually purchase the company, the court determined that the agreement must be enforced.

It's simply a contractual issue. The merger agreement went much further than a wink and a handshake. There was a contract, which is why Axion filed a complaint in the first place to try and get out of the deal. In the business world where companies are publicly traded, you can't contractually agree to acquire a company, which in turn causes fluctuation in the company's stock, only to back out later without ramifications.

Bob, most(if not all!?!) business transactions include a legal contract which specifies the terms of the agreement between both parties. If one party violates those terms, a judge can order them to either abide by the terms and/or be subject to financial or criminal penalties. This is why we employ lawyers.

If you had stepped in front of someone to buy the car and signed the paper this is even worse because you took away the opportunity to sell to someone else, then you say to all the world that the car is not any good.
There were many wrongs done here!

But in Europe the law of contract is not the same as here in this country. Home buyers and sellers in England, for example, don't consider the deal done until a deed is passed from the owner to the buyer, and any contract the parties sign before that time is of no consequence. If these buyers are European, that's their mindset.

One other thought: in his book about business deals, Huntsman Sr. goes out of his way to disparage lawyers, but I'm sure he has lots of them working for him on this one.

I don't think people in the U.S. consider a contract a done deal until it's a done deal but if you sign a contract saying you will do such and such, then you should be held accountable to it or be subject to pay any damages that backing out of that contract may have caused.

I happen to know one of those "lawyers" and he is a quality individual.