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man’s future operating performance to be unpersuasive, calling them "an overly pessimistic view
of Huntsman’s future earnings."

Valuation Issues to Consider in MAC Claims

In such cases when the trier of fact has ruled that a MAC did not occur, the buyer may still be able to
seek rescission of the deal based on a breach of certain representations and warranties made by seller.
These representations and warranties may relate to the condition of the business at the time of closing. In
this case, the practitioner may perform an analysis to demonstrate that the actual value of the company is
significantly lower than what was represented to the buyer through the seller’s financial information.
See chapter 5, "Representation and Warranty Disputes," of this practice aid for further information on
this topic.

Summary of the Practitioner’s Role in Analyzing a MAC Claim

A practitioner can have a significant role in analyzing the data to support or refute a MAC claim. For a
buyer to rescind a merger agreement by invoking the MAC clause, a court will heavily weigh its deci-
sion on an analysis of the following four factors:

 Whether the effect of the adverse event(s) is (are) material

 Whether the effect of the adverse event(s) on the target company is (are) durationally significant
(that is, potentially measured in years, not months)

 Whether the impact of the adverse event(s) on the target company affects the target company
disproportionately compared with the relevant industry

 Whether the adverse event(s) was (were) unknown to the buyer prior to entering into the merger
agreement

Buyers and sellers alike often engage a range of practitioners to assist in the analysis of these four fac-
tors.

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