Material adverse change clauses—key cases


Published by a ³ÉÈËÓ°Òô Banking & Finance expert
Practice notes
COVID-19

Material adverse change clauses—key cases


Published by a ³ÉÈËÓ°Òô Banking & Finance expert

Practice notes
COVID-19
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This Practice Note sets out certain key cases and associated relevant content relating to Material adverse change clauses (MAC) in a financing context. The cases are divided by topic area and include:

  1. •

    interpreting a MAC clause

  2. •

    Acceleration based on a MAC clause

Interpreting a MAC clause

Names of partiesJudgment dateCase summaryRelevant content
BM Brazil I Fundo De Investimento EM Participacoes Multistrategia v Sibanye BM Brazil (Pty) Limited [2024] EWHC 2566 (Comm)10 October 2024Following a blast resulting from drilling, a slope at a mine in Brazil was displaced by up to two metres, the ground moving as a block. The main question was whether this was an event having a ‘material adverse effect’ within the definition used in the contract for the sale and acquisition of the company that owned the mine, enabling the buyer to pull out of the purchase.
Butcher J held that the event was not a ‘material adverse event’ because the change was not material in the context of the acquisition. In reaching this
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Jurisdiction(s):
United Kingdom
Key definition:
Material adverse change definition
What does Material adverse change mean?

Usually a covenant in finance documents referring to a serious change to the business/company, eg change of ownership.

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