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Material Adverse Effect Clauses

NPR Morning Edition did a story on the Sallie Mae buyout, in which “private equity firm JC Flowers, along with Bank of America and JP Morgan Chase is having second thoughts about the $25 billion purchase price.” A key issue is whether recent legislative changes constitute a Material Adverse Effect that under an MAE clause in the acquisition agreement would allow the buyers to walk. Yours truly was interviewed. For more on MAE clauses, go here.