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The ‘Weinstein Clause’: M&A deals in the #MeToo era

Jaclyn Jaeger | October 12, 2018

The threat of sexual misconduct allegations plays an increasingly prominent role in merger and acquisition deals today. Knowing how to protect against this risk could mean the difference between a smooth M&A transaction and one that quickly turns into a reputational nightmare for the buyer.

To lessen the financial and reputational damage resulting from prior sexual misconduct by a top executive of an acquisition target, more buyers involved in M&A agreements are incorporating a provision into their deals, known as the “Weinstein Clause” (also named “#MeToo reps”). Although the “Weinstein Clause” can take several forms, typical legal boilerplate states, “To the knowledge of the company, no allegations of sexual harassment have been made against any current or former executive officer of the company or any of its subsidiaries.” 

Some agreements include additional language requiring the target company to affirm that it “has not entered into any settlement...

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