Page 30 - M & A Disputes

the ability to perform an analysis of the potential claims to support settlement negotiations. Unlike mat-
ters in litigation (in which the practitioner is unlikely to be involved in settlement discussions), profes-
sionals consulting in matters employing ADR may assist the client and legal counsel in seeking a mutu-
ally acceptable outcome for both parties through settlement negotiations.

Arbitration

In arbitration, one or more third-party neutral arbitrators are engaged to act in a similar capacity to a trier
of fact. Parties to the dispute present the facts surrounding their dispute to a neutral arbitrator, or arbitra-
tors, who considers the information presented and adjudicates the dispute. Typically, the ruling set forth
by the neutral arbitrator is binding, unless a nonbinding arbitration is specifically set forth in the acquisi-
tion agreement.

As previously discussed, practitioners are engaged in M&A disputes to serve in a dispute support ca-
pacity, which may include a consulting or testifying role. In engagements that result in arbitration, the
practitioner may be requested to testify to a neutral arbitrator at a hearing.

Practitioners may also be engaged by both parties to serve as neutral arbitrators and to ultimately adjudi-
cate the M&A dispute. Often, M&A agreements between the parties specifically require a practitioner to
be retained as an arbitrator to adjudicate certain types of disputes. In these situations, M&A agreements
may clearly define the arbitration process to be followed by the arbitrator, or they may provide little or
no direction. It is not uncommon for practitioners engaged as arbitrators to outline the arbitration pro-
cess, inclusive of identifying documentation to be exchanged by the parties, outlining a process for ex-
changing statements of position with respect to disputes, and to set hearing procedures and timing. Refer
to chapter 6, "Role of the Neutral Practitioner," of this practice aid for additional information with re-
spect to the role of the neutral arbitrator.

Mediation

In matters in mediation, the parties present their disputes before a mediator who does not adjudicate the
disputes (as would be performed in arbitration). Rather, the mediator facilitates a discussion in an at-
tempt to resolve the dispute among the parties. Mediation can be conducive to successful dispute resolu-
tion because the parties are brought together in a neutral environment where disputes can be freely and
confidentially presented and evaluated before a neutral third-party mediator. The mediator then attempts
to facilitate a resolution. In engagements that result in mediation, the practitioner may be asked to pre-
sent to the mediator and opposing party the related facts and issues to a dispute on behalf of the client
party.

Practitioners are also commonly engaged in M&A disputes to serve as mediators because they have the
necessary business and accounting expertise to assist parties in resolving their disputes and because they
have experience in such disputes. In such engagements, the practitioner mediator does not rule on the
dispute but, rather, assists the parties in reaching a resolution. The goal of mediation is to allow the par-
ties to resolve the disputes among themselves, rather than incur the time and cost of arbitration or litiga-
tion.

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