Super Lawyers
The top Attorneys in Virginia and
the Washington, D.C. metropolitan
area, only 5% of the attorneys
in the state are named in SuperLawyers
ATA NBTA | The National Board of Trial Advocacy Association of Trial Lawyers of America Virginia Trial Lawyers Association

Cooper Tires backs out of deal with Apollo

Virginia residents may be interested in the latest development of the potential sale of Cooper Tire to an India-based company, Apollo Tyres. Cooper announced on Dec. 30 that it is calling off the deal. The Ohio-based company said that Apollo did not have financing for the deal and that Apollo had failed to reach an agreement with Cooper's union employees. Apollo said that it is disappointed in Cooper's decision and may pursue legal action.

The two companies agreed to the acquisition in June 2013. However, the negotiations quickly became contentious as Apollo struggled to reach a deal with the union groups. Apollo also attempted to get a better price on the deal by claiming that labor issues and weak profits justified a price reduction. In December, Cooper took Apollo to court for breach of contract, but the judge in the case ruled that Apollo had not broken the terms of the deal.

It's not yet clear what the legal ramifications are for Cooper's withdrawal from the deal. The company said it would pursue $112.5 million in reverse termination fees from Apollo and may pursue other damages. The contract called for a $50 million termination fee from Cooper, but Cooper executives said they feel they don't owe that money to Apollo.

Business acquisitions can be complicated affairs, no matter how large or small the companies are. It's not uncommon for what initially seems like an amicable deal to turn into a contentious dispute. Issues like compensation, retention of employees and company structure can all play parts in the merger and acquisition process. A business attorney may be able to help a company protect its rights during merger or acquisition negotiations.

Source: ABC News, "Cooper Tire Ends Buyout Agreement With Apollo", Tom Murphy, December 30, 2013

No Comments

Leave a comment
Comment Information

DISCLAIMER: This website is designed to provide only general information; nothing contained herein constitutes legal advice nor is it an offer of legal representation. Use of this website is not intended in any way to create or convey the impression that such use of the website by any person, organization, or entity of any nature and/or kind constitutes any attorney-client relationship whatsoever and any information provided in this website shall not constitute legal advice. The use of any electronic communication available through this website with the Law Office of Richard L. Downey or any person associated with this website shall not constitute attorney-client relationship nor will any communication received by the Law Office of Richard L. Downey constitute an attorney-client communication. The Law Office of Richard L. Downey cannot make any guarantees as to the accuracy or currency of any information contained in or created in this website or the use of any link to another website contained in this website. The information that you obtain at this website is not, nor is it intended to be legal advice. You should consult a lawyer for individual advice concerning your own particular situation.

*The National Board of Trial Advocacy is accredited by the American Bar Association. Currently there is no procedure in the Commonwealth of Virginia for approving certifying organizations.