7th Circ. Won't Overturn Exec's Win In $1.5M Merger Loan Suit
The Seventh Circuit recently upheld a ruling that the owner of a chemical import company does not have to repay a loan taken out in connection with a merger, since the obligation to do so ended once the merger was dissolved. The lower court ruling centered on the meaning of the "agreement" between the merging parties, determining that it consisted of a stock-sharing agreement and a consulting agreement along with a built-in repayment mechanism. More importantly, because the merger, agreement and loan were interdependent, canceling the merger meant canceling both the agreement and the loan as well. The Seventh Circuit said the trial court acted reasonably in its determination and therefore upheld its finding. Litigation Partner Richard Winter represented the owner in the case, which was recapped in a Law360 article.