In Del. Chancery, A Cautionary Tale Of Hacked M&A Payouts

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By Gail Weinstein, Brian Mangino and Maxwell Yim (May 10, 2022, 5:30 PM EDT) — When legal counsel’s emails are hacked and a stockholder’s merger consideration is paid to the hackers, who is liable? Take the April 1 Sorenson Impact Foundation v. Continental Stock Transfer & Trust Co. decision.

Computer hackers intercepted the email communications of a law firm involved with the $130 million merger — pursuant to which Tassel Parent Inc. was acquiring Graduation Alliance Inc.

Tassel, the buyer, is a subsidiary of private equity firm Kohlberg Kravis Roberts & Co. LP.

The hackers posed online as two of actual stockholders of Graduation Alliance, the target, and succeeded in having the merger consideration paid to them instead…

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