The Wall Street Journal reported that Verizon's lawyers are looking at using the "material adverse clause' to renegotiate the terms of the $4.8 billion deal they struck on July.
Verizon’s general counsel, Craig Silliman, said “we have a reasonable basis to believe right now that the impact is material.”
Would you say that losing your whole customer database is an adverse change? I would! Especially after you promise in your merger agreement that no security breach had taken place—and that no breaches will have occurred by the deal’s closing. Yeah, right.
The hack, which Yahoo blamed on a state-sponsored actor, (I'm calling bullshit on that by the way) occurred two years ago but was "discovered" after the merger deal was signed.
It is rare for companies to trigger material adverse change clauses because courts have resisted their use, said Lisa Stark, a partner at K&L Gates LLP. “It has to be a very substantial event. It can’t just be a hiccup.” Again, if this is not a material adverse change, I will eat my hat.
My comment at the end of the story in the WSJ: "Yahoo disregarded best security practices and some key employees fell for a spear phishing attack by Eastern European cybercrime, just like 91% of all data breaches before them.
And then to think that this could have been prevented by new-school security awareness training which helps employees to make smarter security decisions..."
Get a demo and see for yourself how easy it is to first train and then regularly send simulated phishing attacks to your employees and inoculate them against real bad guys.
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