Simon Property Group, Inc., et al. v. Taubman Centers, Inc., et al.

Analysis Group was retained on behalf of Taubman Centers, an operator of indoor malls in the US and Asia, in a merger dispute with Simon Property Group. Under the terms of the merger agreement, Simon could abandon the deal if a material adverse event (MAE) had a disproportionate effect on Taubman relative to the industry or if Taubman failed to operate in the ordinary course of business. Several months into the COVID-19 pandemic, Simon provided notice that it was terminating the merger, claiming that Taubman’s financial performance had disproportionately suffered compared to companies in the industry, and that Taubman took actions that were not in the ordinary course of business.

An Analysis Group team, led by Managing Principals Michael Holland, Michael Cliff, and T. Christopher Borek and Principal Robert L. Vigil, supported six experts who addressed a variety of topics:

  • Professor Barbara Kahn opined that Taubman’s performance was similar to other firms in the mall industry;
  • Robert Grien provided rebuttal analysis related to the ordinary course of business;
  • Professor Jeffrey Wilks explained revenue recognition and lease accounting issues;
  • Professor John C. Coates offered expert opinions on the customs and practices regarding MAE and ordinary course provisions in merger agreements;
  • Eran Bendavid opined on COVID-19 and its anticipated effect on retail behavior; and
  • Professor Thomas Lys evaluated damages.

On the eve of trial, the parties negotiated a revised merger agreement and later consummated the transaction.