Del. Ruling Shows Power of Postclose Governance Provisions in Earnout Disputes and Generative AI Risk

This article, “Del. Ruling Shows Power of Postclose Governance Provisions,” published by Law360, analyzes a recent Delaware Court of Chancery decision highlighting the importance of post-closing governance provisions in earnout disputes. Focusing on Fortis Advisors v. Krafton Inc., it explains how the court granted specific performance, reinstated a CEO and extended an earnout period, underscoring that remedies may go beyond damages. The piece also examines the risks of using generative AI in business decision-making, noting that AI-generated communications may be discoverable and not protected by privilege. Readers will gain practical insight into structuring earnout provisions, preserving operational control and managing litigation and AI-related risks in M&A transactions.

Knowledge management lawyer Sacha Jamal contributed to the article.