Client Alerts
January 6, 2020

Channel Medsystems v. Boston Scientific: Establishing a Material Adverse Effect in Delaware Continues to Require a Showing of Lasting Effects on Business

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After Akorn, Delaware continues to see “heavy burden” for establishing a Material Adverse Effect

On December 18, 2019, the Delaware Court of Chancery, in Channel Medsystems, Inc. v. Boston Scientific Corporation and NXT Merger Corp., reiterated the “heavy burden” for establishing a Material Adverse Effect (“MAE”) under its landmark 2018 decision, Akorn, Inc. v. Fresenius Kabi AG, the first Delaware case to find that an MAE had occurred. Specifically, the Court ruled that despite proving Channel had made certain inaccurate representations when the merger agreement was signed, Boston Scientific failed to show that the misrepresentations had a lasting effect on Channel’s business, and therefore the Court required Boston Scientific to close the acquisition.

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