English High Court Interprets Material Adverse Change Clause

6 June 2013
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  • The English High Court has considered the interpretation of a material adverse change (“MAC”) clause, which is a provision that routinely appears in agreements but on which there is limited case law.
  • The decision provides useful guidance on how a MAC clause may be interpreted by the English courts.
  • The case narrows the ability of a lender to demonstrate a MAC in the financial condition of a borrower, but is likely to have a wider impact on the interpretation of MAC provisions in the context of public and private acquisitions.