Interbake Can't Terminate Mrs. Fields' Cookie Deal Based On MAE Clause

The Delaware Chancery Court in a recent decision held that Mrs. Fields Brands Inc. could force Interbake Foods LLC to honor an agreement to make Mrs. Fields-branded cookies for sale in certain retail store channels. In doing so, the court rejected Interbake’s argument that Mrs. Fields breached a “material adverse effect” clause and made false representations in the agreement.

The decision is the latest example of a Delaware court interpreting an MAE clause (aka material adverse change or MAC), a routine fixture in M&A agreements, and the difficulty parties may have when trying to win based on a claim the clause was breached. Read more.