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Ex-Sallie Mae Suitor Tries to Dodge Breakup Fee in Court

Investor group doesn't want to cough up $900M

By Colleen Barry, Newser Staff

Posted Oct 16, 2007 4:13 AM CDT

(Newser) – The group that offered to buy out educational lender Sallie Mae for $25 billion is now seeking court approval to back out and avoid paying a $900 million break-up fee. The investor group, including Bank of America and JPMorgan Chase, is arguing that recent legislation will reduce the student loan corporation's profits, which investors see as "material adverse circumstances" and grounds to get out of the deal without penalty.

Sallie Mae is insisting that if investors want out, they have to pay the fee. "This is now a fight over $900 million. Let's not pretend there's still a deal on the table," said a source. Delaware courts, where the dispute will be resolved, have traditionally held companies to agreements to pay termination fees.

Sallie Mae hompage (screengrab)

An investment group is trying to get out of paying Sallie Mae $900 million for backing out of its buyout deal. (Shutterstock.com)

Sallie Mae logo (screengrab)

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Ex-Sallie Mae Suitor Tries to Dodge Breakup Fee in Court

Investor group doesn't want to cough up $900M

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Sallie Mae • student loans • mergers and acquisitions • buyout • JC Flowers and Co • George W. Bush

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White House Slams Student Loan Lobby

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Low-volume session sees modest advances in energy, financials

Fight Looms Over Plan to Give Loan Funds to Students

The administration wants to cut out private lenders, setting up a showdown

Chavez: 'Hola, Comrade Bush'

Irony of White House plans to buy stakes in banks isn't lost on Venezuelan prez

InBev Boosts Bid for Bud, Making Buyout Likely

Deal now tops $50 million, and Anheuser is likely to accept

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Ex-Sallie Mae Suitor Tries to Dodge Breakup Fee in Court

Investor group doesn't want to cough up $900M

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OTHER STORIES ON OUR RADAR

Sallie Mae • student loans • mergers and acquisitions • buyout • JC Flowers and Co • George W. Bush

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

White House Slams Student Loan Lobby

Sallie Mae spends $4M to kill bill sending more money to students

Oil Prices Rise; Dow Up 91

Low-volume session sees modest advances in energy, financials

Fight Looms Over Plan to Give Loan Funds to Students

The administration wants to cut out private lenders, setting up a showdown

Chavez: 'Hola, Comrade Bush'

Irony of White House plans to buy stakes in banks isn't lost on Venezuelan prez

InBev Boosts Bid for Bud, Making Buyout Likely

Deal now tops $50 million, and Anheuser is likely to accept

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Newser By Users

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