Andrew Probert Discusses COVID-19 Impact on M&A Disputes

Andrew Probert, Managing Director in Duff & Phelps’ Transaction Advisory Services practice, was recently featured in Accountancy Daily discussing the inevitable increase in the number of M&A disputes as corporate negotiations are likely to become more contentious and complex, as a result of COVID-19. Andrew also underscores the importance of detailed due diligence during this period.

Andrew commented: “One glaringly apparent side effect of the pandemic is an ever-decreasing materiality level, both from a diligence perspective as well as during commercial negotiations. In practical terms, this means that buyers and sellers are likely to argue over every penny, with both parties turning to the interpretation of accounting rules and policies to fight their corners. Those debates have always taken place, but the current environment means they are likely to be more contentious, complex and expensive than ever.”

Andrew discusses the three key areas where disputes can arise, including completion mechanism disputes, material adverse change (MAC) disputes and disputes arising from misrepresentation and fraud.

He added: “Whether these disputes are resolved through commercial discussion, mediation, expert determination or litigations/arbitration, a thorough understanding of the accounting intricacies at play demands a safe pair of hands and deep understanding of accounting treatments and policies.” 

Against an uncertain economic backdrop, the focus on risk has stepped up a notch. “Disputes are inevitable but forewarned is forearmed,” Andrew concluded.

Accountancy Daily subscribers can read the full article here.