Publications

The Sallie Mae MAE Dispute: A Useful Reminder for Buyers & Sellers

Fall 2007
John M. Pollack | Catherine Yoon
Private Equity Developments - Fall 2007

The current dispute between SLM Corporation (“Sallie Mae”) and a consortium of buyers led by J.C. Flowers II, L.P. (“JCF”) concerns the invocation by the buyers of a “material adverse effect” (“MAE”) clause in the parties’ merger agreement. The dispute not only provides a useful opportunity to revisit IBP, Inc. v. Tyson Foods, Inc., the leading Delaware case on MAE clauses, but also serves as a reminder of the importance of clear and unambiguous language in critical deal provisions.