Hexion Specialty Chemicals, Inc. v. Huntsman Corp. Case Brief
Complete case briefs with LSD+
Every LSD.Law brief pairs a full IRAC analysis with opinion summaries at three levels of depth, written by a team of Harvard Law and MIT graduates - a quick synopsis when you are pressed for time, the complete reasoning when you need to go deep.
Adaptive Case Views
Toggle between Flash, Standard, and Expanded. Get what you need, when you need it.
Exam-Ready IRAC Format
We deliver the precise structure professors look for in exam answers.
Complex Cases, Clarified
We break down dense legal reasoning into something digestible, helping you grasp core concepts.
Case Brief Summary & Legal Analysis
tl;dr: Buyer (Hexion) attempted to terminate a merger agreement with seller (Huntsman), alleging material adverse effect and insolvency. Court found Hexion breached its covenants and ordered specific performance of pre-closing obligations.
Legal Significance: This case clarifies Material Adverse Effect (MAE) interpretation, the meaning of “knowing and intentional breach,” and a buyer’s obligations under “reasonable best efforts” covenants in merger agreements.
Case Facts & Court Holding
Key Facts & Case Background
Hexion Specialty Chemicals, Inc. (Hexion), owned by Apollo Global Management, agreed to acquire Huntsman Corp. (Huntsman) in a $10.6 billion leveraged buyout. The merger agreement contained no financing contingency and required Hexion to use “reasonable best efforts” to secure financing and obtain antitrust approvals. It also stipulated uncapped damages for a “knowing and intentional breach of any covenant.” After Huntsman reported disappointing quarterly results amidst a deteriorating credit market, Hexion sought to exit the deal. Hexion commissioned Duff & Phelps to produce an insolvency opinion for the combined entity, providing pessimistic projections and limiting access to Huntsman’s management. Hexion then publicly announced the prospective insolvency and alleged Huntsman suffered a Material Adverse Effect (MAE), filing suit to declare its obligations terminated or liability capped at $325 million. Hexion also allegedly delayed antitrust divestiture processes. Huntsman counterclaimed, seeking specific performance or full contract damages, arguing no MAE occurred and Hexion breached its covenants by undermining the financing and regulatory approval processes.
Court Holding & Legal Precedent
Issue: Did Huntsman suffer a Material Adverse Effect (MAE) excusing Hexion’s performance, and did Hexion commit a knowing and intentional breach of its covenants under the merger agreement by its actions to undermine the financing and regulatory approvals?
No, Huntsman did not suffer an MAE; its financial downturns were not Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor
IRAC Legal Analysis
About IRAC analysis
IRAC (Issue, Rule, Analysis, Conclusion) is the structure professors expect in exam answers. Each LSD.Law brief states the issue, the governing rule with citations, the court's application of that rule, and the conclusion - the same reasoning pattern you will use on exams and in practice.
Legal Issue
Did Huntsman suffer a Material Adverse Effect (MAE) excusing Hexion’s performance, and did Hexion commit a knowing and intentional breach of its covenants under the merger agreement by its actions to undermine the financing and regulatory approvals?
Conclusion
The case underscores the high threshold for MAE claims and establishes that Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip
Legal Rule
A Material Adverse Effect requires an adverse change consequential to the target's Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur a
Legal Analysis
The court found Hexion failed to meet the high burden for proving Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est la
Flash-to-Full Case Opinions
Flash Summary
- Court found no Material Adverse Effect (MAE); buyer failed to meet