The Antitrust "Failing Firm” Defense in the Wake of the COVID-19 Crisis

Since 1930, the Supreme Court has recognized a failing firm defense to an otherwise unlawful merger under the U.S. antitrust laws. The three-part test to prove a failing firm defense generally is met when the company sought to be acquired is in danger of imminent failure, cannot reorganize successfully in bankruptcy, and has made unsuccessful good faith efforts to find alternative purchasers. In past economic crises, such as the 2008-2009 financial crisis, the U.S. antitrust agencies have not eased merger requirements or the standards governing the failing firm defense. Will this change with the COVID-19 pandemic shuttering countless businesses? Could we see litigated merger challenges brought by the U.S. antitrust agencies that turn on the three-part test to prove a failing firm defense?

Featuring:
-- Greg Eastman, Ph.D., Vice President, Cornerstone Research
-- George L. Paul, Partner, White & Case LLP
-- Moderator: Eric Grannon, Partner, White & Case LLP, and former Counsel to the AAG of the DOJ Antitrust Division