Saee Muzumdar

The court found an activist investor failed to clear the “high hurdle” of showing that protective provisions in a merger agreement illegally or inequitably locked up a stock-for-stock, premium merger already resoundingly approved by stockholders.~~On January 23, 2026, the Delaware Court of Chancery rejected activist stockholder HoldCo Opportunities Fund V, L.P.’s emergency request to temporarily enjoin the closing of Comerica Incorporated’s stockholder-approved merger with Fifth Third Bancorp.  HoldCo argued that the merger should be enjoined because a force-the-vote provision, a no-shop and fiduciary out to change the board’s recommendation, a mandatory renegotiation provision following a stockholder no-vote, a one-year outside date, and a 4.7% termination fee unlawfully and unfairly locked Comerica into the Fifth Third deal to the detriment of Comerica and its stockholders.  In a letter decision published on January 26, 2026, Vice Chancellor Morgan T. Zurn explained that HoldCo’s TRO application failed to clear the “high hurdle” of showing that the merger’s deal protections were colorably illegal or inequitable; and that closing a premium deal approved by Comerica’s stockholders, in the absence of any rival bidder, would irreparably harm those stockholders rather than benefit them.  See HoldCo Opp. Fund V, L.P. v. Angulo, C.A. No. 2025-1360-MTZ (Del. Ch. Jan. 26, 2026).~~Background~~In July 2025, HoldCo initiated an activist campaign to force a sale of Comerica to Fifth Third or other possible buyers.  HoldCo agitated for a sale based on its belief that Comerica’s stock price had underperformed for twenty-five years and its CEO refused to address that underperformance.  In September 2025, Comerica commenced a sale process that led to an October 5, 2025 agreement for a stock-for-stock merger with Fifth Third at a 20% premium to Comerica’s then-10-day volume-weighted average stock price.  During the sale process, Comerica’s financial advisor surveyed three other potential buyers and received offers from only one; and all of Fifth Third’s proposals valued Comerica at a higher price per share than the alternative buyer’s proposals.~~In the merger agreement, Comerica and Fifth Third agreed to reciprocal and symmetrical commitments, termination rights, and fiduciary outs, including:~~HoldCo initially touted the merger as “a rare win for Bank Activists” and its reciprocal no-shop, fiduciary out, and termination provisions as “[m]arket.”  Then it reversed course.  On November 21, 2025, HoldCo sued to enjoin the closing of the merger.  The court scheduled a preliminary injunction hearing on HoldCo’s deal protection claims for February 23, 2026, and the parties proceeded with discovery.~~On January 6, stockholders overwhelmingly approved the merger—by 99.7% of the Fifth Third votes cast and 97% of the Comerica votes cast, representing 73% of Comerica’s outstanding stock.  Then, on January 13, the merger received regulatory approval, prompting Fifth Third to advise the court that the merger would close on February 1.  No higher bid had emerged.~~On January 14, HoldCo filed an emergency motion to temporarily enjoin the February 1 closing.  The court denied the TRO on January 23 and published its reasoning on January 26.  The court held that HoldCo failed to carry its burden on all three elements of its TRO application.~~Merits~~HoldCo’s TRO application failed to raise a colorable claim that the parties illegally locked up the merger or inequitably limited the Comerica board’s or stockholders’ ability to consider alternatives.  The merits of HoldCo’s claims turned on unambiguous contractual language and dispositive legal authority.~~Illegality~~The court made quick work of HoldCo’s argument that the deal protections were per se invalid constraints on the Comerica board’s authority under Section 141(a) of the DGCL and Omnicare.  First, the court found its prior decision in Energy Partners “dispositive of HoldCo’s argument that Comerica’s fiduciary out is illegal because it is not accompanied by a termination right.”  Under Delaware law, “a fiduciary out that allows a merger party to engage with an unsolicited proposal and change its recommendation”—like the one here—”enables that party’s board to fulfill its fiduciary duties, even if the other party holds the right to terminate and is entitled to a fee.”~~Second, the court rejected HoldCo’s argument that the one-year outside date made the parties’ symmetrical deal commitments, termination rights, and fiduciary outs illegal:  “The one-year outside date does not strip the board of its managerial authority to decide if the [m]erger is best for stockholders[;] it defines how long the board must work to close the highly regulated [m]erger once stockholders approve it.”  In reaching this conclusion, the court readily distinguished Omnicare and other precedents, finding that, before stockholders approved it, “[n]othing about the [m]erger was a fait accompli or a mathematical certainty,” and that “[n]othing prevented Comerica’s board from considering, negotiating, or pursuing alternative transactions” consistent with its fiduciary out.~~Inequity Under Unocal~~Next, the court similarly rejected HoldCo’s argument that the merger and accompanying deal protections constituted an unreasonable defensive response to HoldCo’s activism under Unocal.  To assuage the “omnipresent specter” of a pending takeover bid “that a board may be acting primarily in its own interests, rather than those of the corporation and its shareholders,” Unocal asks whether a response is defensive and whether a defensive measure is preclusive, coercive, and within a range of reasonableness.  None of these elements favored HoldCo.~~First, the court doubted the merger’s defensiveness, finding HoldCo not only pushed for a sale of Comerica but also predicted Fifth Third was the likeliest partner.  The court was also unconcerned by the fact that Comerica’s CEO secured a post-closing transitional role and three Comerica directors would join Fifth Third’s eleven-member board.~~Second, the court concluded that HoldCo failed to show the deal protections were preclusive or coercive.  Comerica’s fiduciary out left its board free to pursue alternative proposals, and the court found that the 4.7% termination fee was not unreasonable.  Comerica stockholders also had a meaningful ability to vote down the merger without penalty:  there was no voting agreement or naked-no-vote termination fee, and stockholders were free to consider the merger—including its termination fee, absence of a termination out, and one-year outside date—and take it or leave it.~~Irreparable Harm and Balance of Equities~~The court also found that the imminent, irreparable harm and balance of equities elements favored denying the TRO because HoldCo failed to raise a colorable claim that the deal protections chased away would-be topping bidders or otherwise deprived Comerica stockholders of a unique opportunity to obtain more value.  The Court also concluded that the facts—including outreach by Comerica’s advisors and the highest bid from Fifth Third—did not support HoldCo’s claim of irreparable harm.~~Against this backdrop, the court concluded that the balance of equities favored the defendants because the risk of enjoining the merger and depriving stockholders of a certain premium they chose to accept did not outweigh HoldCo’s speculation that stockholders might “benefit from the delay” of closing, which the court found had “no basis in logic or the record.”~~Takeaways~~The following Gibson Dunn lawyers participated in preparing this update: Colin Davis, Andrew Kaplan, Laura O’Boyle, Mark Mixon, and Russell Shapiro.~~Gibson Dunn lawyers are available to assist in addressing any questions you may have regarding these developments.  Please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any of the following leaders and members of the firm’s Mergers & Acquisitions, Private Equity, and Securities Litigation practice groups:~~Mergers & Acquisitions: Robert B. Little – Dallas (+1 214.698.3260, rlittle@gibsondunn.com) Andrew Kaplan – New York (+1 212.351.4064, akaplan@gibsondunn.com) Saee Muzumdar – New York (+1 212.351.3966, smuzumdar@gibsondunn.com) George Sampas – New York (+1 212.351.6300, gsampas@gibsondunn.com)~~Private Equity: Richard J. Birns – New York (+1 212.351.4032, rbirns@gibsondunn.com) Ari Lanin – Los Angeles (+1 310.552.8581, alanin@gibsondunn.com) Michael Piazza – Houston (+1 346.718.6670, mpiazza@gibsondunn.com) John M. Pollack – New York (+1 212.351.3903, jpollack@gibsondunn.com)~~Securities Litigation: Colin B. Davis – Orange County (+1 949.451.3993, cdavis@gibsondunn.com) Monica K. Loseman – Denver (+1 303.298.5784, mloseman@gibsondunn.com) Brian M. Lutz – San Francisco (+1 415.393.8379, blutz@gibsondunn.com) Jason J. Mendro – Washington, D.C. (+1 202.887.3726, jmendro@gibsondunn.com) Mark H. Mixon, Jr. – New York (+1 212.351.2394, mmixon@gibsondunn.com) Laura K. O’Boyle  – New York (+1 212.351.2304, loboyle@gibsondunn.com) Craig Varnen – Los Angeles (+1 213.229.7922, cvarnen@gibsondunn.com)~~Download PDF~~

Feb 2

6 min

The Division of Corporation Finance of the Securities and Exchange Commission issued several new and updated Compliance and Disclosure Interpretations related to Proxy Rules, Executive Compensation, Tender Offers and Schedules, and Securities Act matters.~~On January 23, 2026, the Division of Corporation Finance (the Division) of the Securities and Exchange Commission issued several new and updated Compliance and Disclosure Interpretations (C&DIs) related to Proxy Rules, Executive Compensation, Tender Offers and Schedules, and Securities Act matters.  The updated C&DIs, including, if applicable, comparisons to previously issued C&DIs have been compiled in Annex A and are linked below~~Guidance Related to Proxy Rules and Schedules 14A/14C.~~Eliminating Voluntary PX14A6G Filings for Exempt Solicitations. In welcome news to issuers, the Division amended its prior interpretative position and stated in revised Question 126.06 to the Proxy Rules and Schedules 14A/14C C&DIs that the Division will object to submission of a Notice of Exempt Solicitation on PX14A6G by persons who do not own more than $5 million of stock of the company with respect to which the filing is made.  Although the Division previously has not objected to voluntary EDGAR filings submissions of Notices of Exempt Solicitation by beneficial owners of $5 million or less of relevant securities, the revised C&DI notes that the rule was designed to provide for public notice of exempt solicitations by large shareholders and provides for disclosure of only written soliciting materials “required to be submitted” pursuant to Rule 14a-6(g)(1). In practice, however, most PX14A6G filings are made by shareholders who do not meet the ownership threshold, and in some cases may not own any shares of a company’s stock.  As noted in the Division’s revised interpretation, in those cases the voluntary submission of such notices on EDGAR appears to be primarily a means to generate publicity. The revised interpretation does not directly address how the revised position will be monitored and enforced, but we note that Rule 15 of Regulation S-T provides the SEC with the authority to remove a submission from EDGAR if, among other things, the agency has reason to believe the submission is misleading or unauthorized. Notably, the new interpretation does not prevent shareholder proponents and others from conducting exempt solicitations through platforms other than EDGAR. However, whether or not filed on EDGAR, exempt solicitations remain subject to the anti-fraud provision of Rule 14a-9, which makes it unlawful for any soliciting materials to contain false or misleading statements or omissions of a material fact.  They are also subject to the conditions set forth in Rule 14a-2(b)(1)(vi), under which exemption is not available to “[a]ny person who, because of a substantial interest in the subject matter of the solicitation, is likely to receive a benefit from a successful solicitation that would not be shared pro rata by all other holders of the same class of securities.”~~Flexible Timing of Broker Searches. Under Rule 14a-13(a) and Rule 14c-7(a)(3), a company is generally required to perform a “broker search” at least 20 business days prior to the record date of any meeting of securityholders.  The “broker search” requires the company to notify banks, brokerage firms, and other intermediaries of the meeting record date and request information, including the number of copies of the proxy required for distribution to beneficial shareholders. In new Question 133.02, the Division acknowledged changes in technology since the rule was adopted, and indicated it would not object to a “broker search” performed less than 20 business days before the record date, as long as a company reasonably believes the proxy materials will be timely disseminated to beneficial owners and otherwise complies with Rule 14a-13.  This new guidance will be useful for shareholder meetings when timing uncertainty—often caused by the need for last-minute shifts in meeting dates or possible SEC filing review—previously required registrants to anticipate key milestones or conduct multiple broker searches in order to comply with the rule. Going forward companies can work with their transfer and proxy mailing agents to determine an appropriate time for conducting the broker search.~~Effective Date for Corporate Action by Written Consent. New Question 182.01 clarifies that SEC Rules do not pre-empt state corporate law when determining the effective date of corporate action taken by written consent or authorization of dissident shareholders.  When securityholders take corporate action by written consent or authorization without proxies or consents being solicited by the company, Exchange Act Rule 14c-2 requires the registrant to distribute an information statement to its securityholders at least 20 calendar days prior to the earliest date on which such corporate action may be taken or become effective.  In contested scenarios involving the solicitation of written consents by dissident shareholders, the company may not know of the dissident’s solicitation of written consents or may delay distribution of an information statement.  The Division explained that “[a]pplicable state law or the registrant’s governing documents, not Rule 14c-2, determines when a corporate action taken by written consent becomes effective . . . the failure to comply with the 20-calendar-day requirement in Rule 14c-2 does not invalidate the corporate action.”  The Division provided that when written consents are solicited by a dissident securityholder, the Division will not object to failure to satisfy the Rule 14c-2 if the company distributes the information statement as soon as practicable after it becomes aware of the written consents.~~Executive Compensation Disclosure in Spin-Offs. The Division revised Question 217.01 to Regulation S-K C&DIs to clarify the analysis that applies to determining what executive compensation disclosures are required under Item 402 of Regulation S-K in the context of spin-off transactions. The prior C&DI was focused on whether spin-offs should be treated as initial public offerings (IPOs, each an IPO), which would require at least one year of historic executive compensation disclosure for a spin-off company’s (the SpinCo) future named executive officers. As a result, prior guidance did not appreciate that for spin-offs, unlike IPOs, historic executive compensation information often had nothing to do with a SpinCo’s actual executive compensation program but rather was completely determined and designed by its parent. The revised C&DI makes clear that the need for inclusion of historical executive compensation information depends on analysis of whether, before the spin-off, the SpinCo operated as a separate division or standalone business of the parent, and if so, whether there was continuity of management. As such, where the parent spins off a subsidiary that operated a discrete line of business and the subsidiary’s executive officers, before and after the spin-off, (1) were the same, (2) provided the same services to the subsidiary, and (3) provided no services to the parent, then historical compensation disclosure will generally be required.  In this circumstance, Instruction 1 to Item 402(c), which generally requires only one year of executive compensation for registrants that were not previously subject to SEC reporting requirements, should be available to issuers. In contrast, where the registrant is composed of portions of different parts of the parent’s business or will have new management after the spin-off, then the historical compensation information generally need not be disclosed, and only post-spin-off compensation needs to be reported.  In this case, the SpinCo need only report compensation awarded to, earned by, or paid to the SpinCo’s named executive officers in connection with and following the spin-off.~~New Clarifications to Tender Offer Rules and Schedules.~~Permissible Outside Purchases Exception in Tier I Tender Offers. The Division issued new Question 166.02 to note that the Rule 14e-5(b)(10) exception for purchases during cross-border tender offers remains available for Tier I cross-border tender offers, even if permitted purchases outside of the tender offer occur after the public announcement of, but before the offering documents relating to, the tender offer are distributed.  If the interpretation is relied on, the tender offer documents must disclose that such purchases have already occurred and, if applicable, may continue during the offer.  The intent of the exception is to allow purchases outside of the U.S. tender offer regime that are permitted by laws of the subject company’s home jurisdiction if other conditions are met.  The same approach applies to the parallel disclosure conditions in Rule 14e-5(b)(11)(iv) and Rule 14e-5(b)(12)(i)(D).~~Financial Advisor Affiliate Purchases. The Division issued a new Question 166.03 to clarify that, when an affiliate of a financial advisor makes purchases outside of a tender offer in an “agent-of-the-offeror capacity,” such purchases are not subject to Rule 14e-5(b)(12)(G)’s prohibition on purchases made to facilitate the tender offer. However, such “agent-of the-offeror” purchases must still comply with the other conditions of Rule 14e-5(b)(12), including the requirement to increase the tender offer price if a higher price is paid outside the offer.~~Securities Act Issues: Extension of Guidance Regarding Stockholder Lock-Ups.~~Lock-Ups Before Registration. In March 2025, the Division updated its guidance regarding the Securities Act implications of using lock-ups and written consents in merger transactions.  At the time, the Division indicated it would not object to the registration of an offer or sale of securities where lock-up agreements, such as voting agreements and support agreements, were signed, so long as certain criteria were satisfied. Those interpretations are addressed in our publication, SEC Corp Fin Staff Updates Guidance on Lock-Ups, Written Consents and Financing Matters in Tender Offers and Business Combination Transactions (March 7, 2025).~~Lock-Ups in Registered Exchange Offers. The Division has further updated its interpretation and Question 139.29 regarding lock-up agreements and agreements to tender, which used to be limited to the context of registered exchange offers of debt.  The Division expanded its interpretation to include any registered exchange offer on Form S-4 or Form F-4.  The Division added that, even if the registration of such offers and sales on Form S-4 or Form F-4 does not satisfy a handful of conditions detailed in the updated C&DI, it will not object to the registration of such offers and sales if:~~(1) the accredited investors or qualified institutional investors who executed the lock-up agreements or agreements to tender will be offered and sold securities only in an offering made pursuant to a valid Securities Act exemption; and~~(2) the securities registered on the Form S-4 or Form F-4 will be offered and sold only to those securityholders who did not execute such agreements.~~Lock-Ups in Negotiated Third-Party Exchange Offers. The Division similarly revised Question 139.30 to expand its interpretation regarding lock-up agreements and agreements to tender before the filing of the Form S-4 or Form F-4 in the context of negotiated third-party equity exchange offers to all negotiated third-party exchange offers.  The Division also clarified that it will not object to the registration of such exchange offers on Form S-4 or Form F-4 if:~~(1) the target company insiders who executed lock-up agreements or agreements to tender will be offered and sold securities only in an offering made pursuant to a valid Securities Act exemption; and~~(2) the securities registered on the Form S-4 or Form F-4 will be offered and sold only to those securityholders who did not execute such agreements.~~Lock-Ups in Rule 145(a) Transactions. The Division revised Question 239.13 to note, consistent with the interpretation provided in Question 139.29 and Question 139.30, that when lock-up agreements in the context of a Rule 145(a) transaction are executed before the filing of a registration statement on Form S-4 or Form F-4, such registration is generally not permitted unless certain conditions are met.~~Securities Act Issues: New Guidance Regarding Integration of Securities Offerings.~~The Division issued new guidance regarding Rule 152 under the Securities Act, which provides a general principle on when securities offerings will be “integrated” for purposes of determining the availability of registration statements and exemptions and provides non-exclusive safe harbors from integration of registered and exempt offerings.~~Non-Integration of Regulation D Exempt Offerings Under Rules 506(b) and 506(c). Securities Act Rule 506 provides alternative exemptions from registration for securities offerings conducted under Regulation D. New Question 148.01 states that an issuer may sell securities under Rule 506(b) to individuals whom it previously solicited in a Rule 506(c) offering, so long as the issuer establishes a pre-existing, substantive relationship with those investors before starting the Rule 506(b) offering.  Because the investors were originally reached through general solicitation in the Rule 506(c) offering, the issuer must rely on Rule 152(a)(1)(ii), not the safe harbor that applies where no prior solicitation occurred (i.e., the issuer cannot rely on Rule 152(a)(1)(i)).  Whether a substantive relationship exists depends on facts and circumstances, with the “quality” of the relationship being the most important factor.  The Division noted the issuer “must have sufficient information to evaluate and must, in fact, evaluate the investor’s sophistication, financial circumstances, and ability to understand the nature and risks of the securities.”  These investors may include the issuer’s existing or prior investors, or friends or family of the issuer’s control persons.  A substantive relationship cannot be created solely by waiting a set period or using a short accreditation questionnaire. The Division noted that establishing a pre-existing substantive relationship can be challenging when engaging in an online offering.~~Registration Alone Not Integration. New Question 148.02 states that the mere fact that a registration statement is effective alone does not raise integration concerns under Rule 152.~~Integration After Failed Shelf Takedown. In addition, the Division withdrew former Question 152.02 and revised its content in a new Question 148.03 regarding an issuer that was unsuccessful in completing a takedown offering from an existing shelf registration statement.  Previously, the interpretation allowed the offering to be completed in a private placement if the company disclosed withdrawal of its registration statement in a prospectus supplement, in reliance on Rule 155(c).  The revised interpretation instead allows the offering to be completed privately if the issuer complies with the general principle of integration under Rule 152(a)(1). Whereas previously an issuer that failed to complete a shelf takedown essentially had one clean exit ramp—Rule 155 and its formulaic conditions—it may now rely on the flexibility of Rule 152 to assess its particular facts and decide whether the private offering stands on its own.~~The Division also revised and withdrew several interpretations to integrate or consolidate related Securities Act guidance.~~The following Gibson Dunn lawyers prepared this update: Mellissa Campbell Duru, Ronald Mueller, Andrew Fabens, Julia Lapitskaya, Sebastian Fain, Krista Hanvey, Gina Hancock, Rodrigo Surcan, Chad Kang, and Thomas Franck.~~Gibson Dunn’s lawyers are available to assist with any questions you may have regarding the SEC’s announcement, or federal securities laws and regulations more generally.  Please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any of the following leaders of the firm’s Capital Markets, Securities Regulation & Corporate Governance, Mergers & Acquisitions, or Executive Compensation & Employee Benefits practice groups:~~Capital Markets: Andrew L. Fabens – New York (+1 212.351.4034, afabens@gibsondunn.com) Hillary H. Holmes – Houston (+1 346.718.6602, hholmes@gibsondunn.com) Stewart L. McDowell – San Francisco (+1 415.393.8322, smcdowell@gibsondunn.com) Peter W. Wardle – Los Angeles (+1 213.229.7242, pwardle@gibsondunn.com)~~Securities Regulation & Corporate Governance: Elizabeth Ising – Washington, D.C. (+1 202.955.8287, eising@gibsondunn.com) Thomas J. Kim – Washington, D.C. (+1 202.887.3550, tkim@gibsondunn.com) Julia Lapitskaya – New York (+1 212.351.2354, jlapitskaya@gibsondunn.com) Lori Zyskowski – New York (+1 212.351.2309, lzyskowski@gibsondunn.com)~~Mergers & Acquisitions: Robert B. Little – Dallas (+1 214.698.3260, rlittle@gibsondunn.com) Saee Muzumdar – New York (+1 212.351.3966, smuzumdar@gibsondunn.com) George Sampas – New York (+1 212.351.6300, gsampas@gibsondunn.com)~~Executive Compensation & Employee Benefits: Sean C. Feller – Los Angeles (+1 310.551.8746, sfeller@gibsondunn.com) Krista Hanvey – Dallas (+1 214.698.3425, khanvey@gibsondunn.com)~~© 2026 Gibson, Dunn & Crutcher LLP.  All rights reserved.  For contact and other information, please visit us at www.gibsondunn.com.~~Attorney Advertising: These materials were prepared for general informational purposes only based on information available at the time of publication and are not intended as, do not constitute, and should not be relied upon as, legal advice or a legal opinion on any specific facts or circumstances. Gibson Dunn (and its affiliates, attorneys, and employees) shall not have any liability in connection with any use of these materials.  The sharing of these materials does not establish an attorney-client relationship with the recipient and should not be relied upon as an alternative for advice from qualified counsel.  Please note that facts and circumstances may vary, and prior results do not guarantee a similar outcome.~~Download PDF~~

Jan 26

12 min

With the passage of SB 25, California becomes the third state to pass a state-level “mini-HSR” regime, joining Washington and Colorado, which enacted similar legislation in 2025. The Act applies to HSR notifications filed on or after January 1, 2027.~~On February 10, California Governor Gavin Newsom signed SB 25 into law.[1]  SB 25—the California Uniform Antitrust Pre‑Merger Notification Act—requires certain Hart‑Scott‑Rodino (HSR) filers to submit a copy of their federal premerger notification materials to the California Attorney General.  Unlike the HSR Act, a California State filing does not trigger a waiting period that suspends the parties from closing their transaction, but the filing is mandatory and designed to create an early, streamlined avenue for state review and coordination.  With the passage of SB 25, California becomes the third state to pass a state-level “mini-HSR” regime, joining Washington and Colorado, which enacted similar legislation in 2025.  The Act applies to HSR notifications filed on or after January 1, 2027.[2]~~The bill is based on model antitrust legislation published by the Uniform Law Commission and is designed to align state practice with federal HSR procedures rather than create a wholly independent state review regime.  While the California Law Revision Commission has advanced broader antitrust proposals on single‑firm conduct and concerted action,[3] and continues to consider broader reform on mergers and acquisitions, SB 25 instead focuses narrowly on premerger notification procedures tied to HSR filings.  SB 25 therefore seeks to improve process and coordination, not to redefine substantive merger standards.~~California Attorney General Rob Bonta previously endorsed SB 25, emphasizing that the measure would provide “upfront access to federal merger filings,” “facilitate early information sharing and coordination,” and include “strong confidentiality provisions,” with the stated aim of streamlining merger evaluation for both the California Department of Justice (CA DOJ) and businesses.  This endorsement suggests the state plans to coordinate, not duplicate, federal merger review.~~SB 25’s Requirements, Protections, and Penalties~~SB 25 requires HSR filers to submit a complete electronic copy of the HSR form to the CA DOJ when either of the following is true:~~The filing party must also submit a complete electronic copy of the HSR form to the CA DOJ contemporaneously—at the latest, within one business day of the federal filing.  If the filing party’s principal place of business is in California, the submission must include a complete electronic copy of any “additional documentary material” filed with the HSR form.  And if the obligation to file is triggered by meeting the California sales threshold (rather than by maintaining a principal place of business in California), the CA DOJ may request the additional documentary material, and the filer must provide it within seven days of the request.[5]~~SB 25 enables the Attorney General to impose filing fees of $1,000 if the filing person has its principal place of business in California or $500 if the filing person had annual net sales in California of the goods or services involved in the transaction of at least 20% of the prevailing federal HSR filing threshold.  The fees are deposited into the Attorney General’s antitrust account.[6]~~The Attorney General must provide a secure means to receive and store submitted materials. [7]~~SB 25 provides robust confidentiality protections that prohibit the CA DOJ from making any component of the HSR form public; exempt these materials from disclosure under California’s public‑records law, aligning with HSR confidentiality norms; and permit disclosure only under protective order in an administrative or judicial proceeding where the proposed merger is relevant.[8]  However, SB 25 does allow the CA DOJ to share information with the Federal Trade Commission, the United States Department of Justice, and with other states that have adopted the ULC’s Uniform Antitrust Pre-Merger Notification Act (or substantively equivalent legislation) and that provide confidentiality assurances at least as protective as those in the uniform act.[9]  For reciprocity‑based disclosures to other states, the CA DOJ must provide at least five business days’ advance notice to the submitting party before making a disclosure.~~After written notice and a three‑business‑day cure period, the Attorney General may impose or seek to impose civil penalties of up to $25,000 per day for failure to submit the required materials or to respond timely to a request for additional documentary material.[10] Practical Implications for Transactions~~Transacting parties that already file HSR materials and either have a California principal place of business or meet the California sales‑based nexus will need to implement a parallel process to transmit a complete electronic copy of the HSR form to the CA DOJ within one business day of the federal filing.  This is largely an administrative alignment task rather than a new analytical requirement.~~Parties with a California principal place of business must include any HSR “additional documentary material” in their California submission at the outset, which effectively mirrors the federal submission package.  And parties that qualify solely under the sales‑based nexus should prepare to produce additional documentary material within seven days if requested by the CA DOJ.~~Prior to enactment of this legislation, the California Attorney General already could investigate merger activity by issuing subpoenas for HSR information, from the Federal Trade Commission or the U.S. Department of Justice but CA DOJ was not automatically notified of filings that may be in the state’s interest.~~Takeaways~~SB 25 is intentionally tethered to the federal HSR framework, avoiding an independent California notification regime with novel thresholds, forms, or substantive presumptions.  The bill requires only a copy of what the HSR already demands, on a synchronized timetable, and leverages existing federal confidentiality norms, federal definitions, and federal threshold calibration.~~Because SB 25 is integrated with HSR timing and form requirements, parties should expect earlier, more routine outreach from the CA DOJ in transactions with a California nexus.  The aim is explicit: to “facilitate early information sharing and coordination between state and federal antitrust officials,” reducing the need for ad hoc negotiations or subpoenas to obtain HSR materials of interest.  This early access may allow the CA DOJ to participate more actively in merger assessments that affect California markets, while preserving uniformity and confidentiality.~~The bill’s reciprocity provisions also anticipate information‑sharing with other states that have enacted the uniform act or a substantively equivalent statute, but only with confidentiality assurances that meet or exceed the uniform act’s standards.~~Gibson Dunn attorneys are available to discuss how this legislation and other state mini-HSR laws may apply to your business, affect your legal compliance policies and address any other questions you may have regarding the issues discussed in this update.~~[1] Governor Newsom Signs Legislation 2.10.26, https://www.gov.ca.gov/2026/02/10/governor-newsom-signs-legislation-2-10-26/.~~[2] Id. at Section 16787.~~[3] See December 23, 2025 Client Alert; June 23, 2025 Client Alert.~~[4] SB 25, Uniform Antitrust Pre-Merger Notification Act, Section 16782(a).~~[5] Id. at Section 16782(b-c).~~[6] Id. at Section 16782(e).~~[7] Id. at Section 16782(d).~~[8] Id. at Section 16783(a-c).~~[9] Id. at Section 16783(d).~~[10] Id. at Section 16785.~~The following Gibson Dunn lawyers prepared this update: Rachel Brass, Daniel Swanson, Kristen Limarzi, Caeli Higney, Julian Kleinbrodt, Sarah Roberts, Kunal Jhaveri, and Tristan Locke.~~Gibson Dunn lawyers are available to assist in addressing any questions you may have regarding the issues discussed in this update. Please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any leader or member of the firm’s Antitrust and Competition, Private Equity, or Mergers and Acquisitions practice groups:~~Antitrust and Competition: Rachel S. Brass – San Francisco (+1 415.393.8293, rbrass@gibsondunn.com) Jamie E. France – Washington, D.C. (+1 202.955.8218, jfrance@gibsondunn.com) Sophia A. Hansell – Washington, D.C. (+1 202.887.3625, shansell@gibsondunn.com) Caeli A. Higney – San Francisco (+1 415.393.8248, chigney@gibsondunn.com) Julian W. Kleinbrodt – San Francisco (+1 415.393.8382, jkleinbrodt@gibsondunn.com) Kristen C. Limarzi – Washington, D.C. (+1 202.887.3518, klimarzi@gibsondunn.com) Samuel G. Liversidge – Los Angeles (+1 213.229.7420, sliversidge@gibsondunn.com) Michael J. Perry – Washinton, D.C. (+1 202.887.3558, mjperry@gibsondunn.com) Cynthia Richman – Washington, D.C. (+1 202.955.8234, crichman@gibsondunn.com) Bradley P. Smith – New York (+1 212.351.5376, bpsmith@gibsondunn.com) Daniel G. Swanson – Los Angeles (+1 213.229.7430, dswanson@gibsondunn.com) Stephen Weissman – Washington, D.C. (+1 202.955.8678, sweissman@gibsondunn.com)~~Private Equity: Richard J. Birns – New York (+1 212.351.4032, rbirns@gibsondunn.com) Ari Lanin – Los Angeles (+1 310.552.8581, alanin@gibsondunn.com) Michael Piazza – Houston (+1 346.718.6670, mpiazza@gibsondunn.com) John M. Pollack – New York (+1 212.351.3903, jpollack@gibsondunn.com)~~Mergers and Acquisitions: Robert B. Little – Dallas (+1 214.698.3260, rlittle@gibsondunn.com) Saee Muzumdar – New York (+1 212.351.3966, smuzumdar@gibsondunn.com) George Sampas – New York (+1 212.351.6300, gsampas@gibsondunn.com)~~© 2026 Gibson, Dunn & Crutcher LLP.  All rights reserved.  For contact and other information, please visit us at www.gibsondunn.com.~~Attorney Advertising: These materials were prepared for general informational purposes only based on information available at the time of publication and are not intended as, do not constitute, and should not be relied upon as, legal advice or a legal opinion on any specific facts or circumstances. Gibson Dunn (and its affiliates, attorneys, and employees) shall not have any liability in connection with any use of these materials.  The sharing of these materials does not establish an attorney-client relationship with the recipient and should not be relied upon as an alternative for advice from qualified counsel.  Please note that facts and circumstances may vary, and prior results do not guarantee a similar outcome.~~Download PDF~~

Feb 11

7 min

Absent an appeal, the premerger notification requirements will revert to the prior HSR reporting rule on February 20, 2026.~~On February 12, 2026, the U.S. District Court for the Eastern District of Texas vacated the Federal Trade Commission’s 2024 rule overhauling the Hart-Scott-Rodino (HSR) premerger notification form (the 2024 Rule), finding that the FTC failed to analyze whether the 2024 Rule’s benefits outweighed its substantial costs. The Court stayed its ruling for seven days, affording the FTC an opportunity to assess an appeal. Absent an appeal, the premerger notification requirements will revert to the prior HSR reporting rule on February 20, 2026.~~Vacated HSR Rule Had Substantially Expanded Scope of Pre-Merger Review~~The 2024 Rule represented the most significant overhaul of HSR filing requirements since the publication of the original premerger notification form in 1978. The 2024 Rule added disclosures that previously arose only in later-stage investigations. Key additions included: deal documents from supervisory deal team leads (not just directors and officers); ordinary course competitive documents shared with the CEO or Board within one year of filing; narrative descriptions of transaction rationale and competitive overlaps; and supply relationship information.~~The final rule went into effect on February 10, 2025. Notably, the rulemaking garnered bipartisan support: the FTC approved the final rule on a 5-0 vote, and the current FTC leadership had embraced the 2024 Rule prior to this decision.~~District Court Vacated HSR Rule as Exceeding FTC’s Authority~~In Chamber of Commerce v. FTC, a coalition of business groups led by the U.S. Chamber of Commerce challenged the FTC’s 2024 Rule. On February 12, 2026, Judge Jeremy D. Kernodle on the U.S. District Court for the Eastern District of Texas granted summary judgment to the plaintiffs, holding that the 2024 Rule exceeded the FTC’s statutory authority because “the agency has not shown that the Rule’s claimed benefits will ‘reasonably outweigh’ its significant and widespread costs.”~~Under the HSR Act, the FTC may request only pre‑merger information “necessary and appropriate” to assess whether a transaction may violate the antitrust laws—a standard the Court interpreted as requiring a reasonable cost‑benefit analysis. The FTC failed to meet that requirement. Although the FTC acknowledged that the 2024 Rule would nearly triple filing time—from 37 to 105 hours—the Court found the FTC could not substantiate the benefits it claimed the changes would produce. For example, the FTC was unable to identify a single illegal merger in the 46‑year history of the prior form that the new form would have prevented. The Court rejected the FTC’s argument that the 2024 Rule would conserve agency resources, noting that any efficiency gains would accrue only in the roughly 8% of transactions the FTC investigates, while all filers would bear the increased compliance burden.~~Judge Kernodle also ruled that the 2024 Rule is arbitrary and capricious because the FTC failed to consider whether the 2024 Rule’s benefits “bear a rational relationship” to its costs and the FTC “did not adequately explain its rejection of less costly and burdensome alternatives,” such as targeted voluntary submissions or more focused Second Requests.~~The Court vacated and set aside the 2024 Rule but stayed its decision through February 19, 2026. During this period, the FTC may choose to appeal or allow the prior HSR reporting rule to take effect.~~Key Takeaways for Dealmakers~~The 2024 Rule Will Likely Remain in Effect During Appeal. If the FTC elects to appeal, the Agency will likely secure a further stay of the Court’s vacatur order pending appeal. In this case, deal teams should continue preparing filings under the 2024 Rule’s requirements. If, however, the FTC declines to appeal, the premerger notification requirements will revert to the prior HSR reporting rule on February 20. Regardless of the FTC’s decision, the Court’s decision will not affect the recently-announced jurisdictional thresholds and filing fees for 2026.~~The FTC May Again Promulgate Heightened HSR Filing Requirements if the Vacatur is Sustained. The Court’s decision rests on procedural grounds, not a rejection of the FTC’s authority to modernize the HSR form. Given the unanimous, bipartisan FTC support for stronger filing requirements, if the vacatur is sustained, the FTC may promulgate a similar rule with a more developed administrative record. Dealmakers should not expect a permanent return to the pre-2024 filing regime.~~Agency Staff Retain Significant Investigative Tools. Even if the 2024 Rule is ultimately vacated, FTC and DOJ Antitrust Division staff retain authority to request similar information from merging parties on a voluntary basis during the initial HSR waiting period, and on a mandatory basis at a later stage for transactions that trigger a Second Request. The practical implication: the information the FTC sought to require upfront through the 2024 Rule, including ordinary course business documents, will likely still be requested in transactions that draw agency interest.~~Early Engagement with Antitrust Counsel Remains Critical. Regardless of the fate of the 2024 Rule, parties considering M&A activities should continue engaging antitrust counsel early. Transaction agreements may benefit from additional regulatory flexibility to accommodate potential changes in filing requirements or extended review timelines.~~State Mini-HSR Regimes Continue to Expand. Dealmakers should also monitor evolving state premerger notification requirements. California recently enacted SB 25, joining Washington and Colorado in requiring certain HSR filers to submit copies of their federal filings to state authorities, effective January 1, 2027. These requirements underscore the broader trend toward enhanced premerger scrutiny at the federal and state levels.~~For further details on these developments, see our previous Client Alerts and related HSR resources on the firm’s Antitrust and Competition page here.~~The following Gibson Dunn lawyers prepared this update: Jamie France, Kristen Limarzi, Michael Perry, Brad Smith, Logan Billman, and Caroline Black.~~Gibson Dunn lawyers are available to assist in addressing any questions you may have regarding the issues discussed in this update. Please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any leader or member of the firm’s Antitrust and Competition, Private Equity, or Mergers and Acquisitions practice groups:~~Antitrust and Competition: Rachel S. Brass – San Francisco (+1 415.393.8293, rbrass@gibsondunn.com) Jamie E. France – Washington, D.C. (+1 202.955.8218, jfrance@gibsondunn.com) Sophia A. Hansell – Washington, D.C. (+1 202.887.3625, shansell@gibsondunn.com) Caeli A. Higney – San Francisco (+1 415.393.8248, chigney@gibsondunn.com) Julian W. Kleinbrodt – San Francisco (+1 415.393.8382, jkleinbrodt@gibsondunn.com) Kristen C. Limarzi – Washington, D.C. (+1 202.887.3518, klimarzi@gibsondunn.com) Samuel G. Liversidge – Los Angeles (+1 213.229.7420, sliversidge@gibsondunn.com) Michael J. Perry – Washinton, D.C. (+1 202.887.3558, mjperry@gibsondunn.com) Cynthia Richman – Washington, D.C. (+1 202.955.8234, crichman@gibsondunn.com) Bradley P. Smith – New York (+1 212.351.5376, bpsmith@gibsondunn.com) Daniel G. Swanson – Los Angeles (+1 213.229.7430, dswanson@gibsondunn.com) Stephen Weissman – Washington, D.C. (+1 202.955.8678, sweissman@gibsondunn.com)~~Private Equity: Richard J. Birns – New York (+1 212.351.4032, rbirns@gibsondunn.com) Ari Lanin – Los Angeles (+1 310.552.8581, alanin@gibsondunn.com) Michael Piazza – Houston (+1 346.718.6670, mpiazza@gibsondunn.com) John M. Pollack – New York (+1 212.351.3903, jpollack@gibsondunn.com)~~Mergers and Acquisitions: Robert B. Little – Dallas (+1 214.698.3260, rlittle@gibsondunn.com) Saee Muzumdar – New York (+1 212.351.3966, smuzumdar@gibsondunn.com) George Sampas – New York (+1 212.351.6300, gsampas@gibsondunn.com)~~© 2026 Gibson, Dunn & Crutcher LLP.  All rights reserved.  For contact and other information, please visit us at www.gibsondunn.com.~~Attorney Advertising: These materials were prepared for general informational purposes only based on information available at the time of publication and are not intended as, do not constitute, and should not be relied upon as, legal advice or a legal opinion on any specific facts or circumstances. Gibson Dunn (and its affiliates, attorneys, and employees) shall not have any liability in connection with any use of these materials.  The sharing of these materials does not establish an attorney-client relationship with the recipient and should not be relied upon as an alternative for advice from qualified counsel.  Please note that facts and circumstances may vary, and prior results do not guarantee a similar outcome.~~Download PDF~~

Feb 13

6 min

Grounded in principles of voidability and laches, the opinion avoided reaching the merits of a controversial trial-court decision already addressed by the Delaware General Assembly.~~On January 20, 2026, the Delaware Supreme Court, sitting en banc, issued an opinion bringing an end to one chapter of the “DExit” saga.[1]  The unanimous opinion, authored by Justice Gary F. Traynor, effectively reversed a controversial ruling by the Delaware Court of Chancery, discussed in our February 28, 2024 Client Alert, that certain provisions in a stockholder agreement between a public company and its stockholder founder were unenforceable under Section 141(a) of the Delaware General Corporation Law (DGCL).  Rather than addressing the validity of the disputed provisions, however, the Delaware Supreme Court held that (a) the provisions were at most voidable (as opposed to void ab initio), and thus claims challenging them were subject to equitable defenses (such as laches), and (b) the plaintiff’s claim was time-barred under the laches doctrine because it fully accrued upon adoption of the provisions nine years before the complaint was filed, and not within the three-year limitations period under the “continuing-wrong doctrine.”~~The public’s negative reaction to the trial court’s decision was so fierce that the Delaware General Assembly promptly adopted Section 122(18) of the DGCL, authorizing the inclusion in stockholder agreements of corporate-governance provisions like those that had been challenged in this case as facially invalid.  Although Section 122(18) retroactively authorized the relevant governance provisions in stockholder agreements entered into before the statute’s August 1, 2024 effective date, the statute had no effect on litigation completed or pending before such date.  Thus, although the Delaware legislature did not reverse the trial court’s decision entirely, it limited its prospective application.  Now, the Delaware Supreme Court’s opinion has eliminated its application altogether.~~The Trial Court’s Decision~~Nine years after a public company and its founder entered into a stockholder agreement, a minority stockholder challenged the facial validity of certain provisions granting governance rights to the founder as inconsistent with Section 141(a) of the DGCL.  The company moved for summary judgment, arguing among other things that the stockholder’s challenge was time-barred by the doctrine of laches and the challenged provisions were valid under Section 141(a).~~The trial court rejected the company’s laches defense on two bases.  First, the trial court determined that the equitable defense of laches was not available because, assuming the challenged provisions conflicted with Section 141(a), they were void ab initio—rather than merely voidable—and equitable defenses like laches are not applicable to void acts as a matter of law.  The trial court reasoned that any contract provision adopted in a manner exceeding a board’s or management’s authority—as the challenged provisions allegedly were—is void ab initio.~~Second, the trial court held in the alternative that, even if laches were an available defense, the stockholder’s challenge was timely under the “continuing wrong” doctrine.  In doing so, the trial court rejected the company’s argument that the plaintiff’s claim accrued when the challenged provisions were adopted nine years earlier, and accepted the plaintiff’s argument that the company’s continuing operation under the constraints of the challenged provisions constituted ongoing violations of Section 141(a).~~Then, as discussed in our February 28, 2024 Client Alert, the trial court proceeded to hold that the challenged provisions were unenforceable because they deprived the board of a significant portion of its authority under Section 141(a) and did not appear in the company’s charter.  The parties appealed both decisions to the Delaware Supreme Court, which reversed the trial court’s ruling on laches and declined to reach the validity of the provisions.~~Voidability~~In reversing the laches ruling, the Delaware Supreme Court held that the trial court misapplied the law for determining voidability.  Under Delaware law, contract provisions in the corporate-governance context are void as ultra vires or against public policy if the corporation cannot, in any case, lawfully adopt them; whereas such provisions are only voidable if the corporation could lawfully adopt them in an appropriate manner.  To apply this rule, the Court explained, courts should focus on the subject matter of the provisions, not the manner in which they were adopted.  Ultimately, the Court held that the plaintiff had failed to carry its burden of establishing that the challenged provisions were void because it had identified no mandatory provision of the DGCL or other Delaware law that would prohibit the company from adopting the challenged provisions by charter amendment or other method.  In other words, the plaintiff had failed to establish that the challenged provisions’ subject matter—and not merely their presence outside of the charter—conflicted with Delaware law.  Thus, the Court concluded that the challenged provisions were, at most, voidable, not void ab initio, and therefore the plaintiff’s claim was subject to a laches defense.~~Laches~~Next, the Court held that the trial court erred in determining that laches would not bar the claim.  First, the Court rejected the trial court’s application of the “continuing wrong” method of determining when the plaintiff’s claim accrued, reasoning that, under Delaware law, a corporation’s performance under a contract—and associated effects or implications—are not continuing wrongs even if the manner in which the contract was adopted might have been unlawful.  Instead, the Court explained, the plaintiff’s claim “fit neatly” within the “discrete act method,” which applies when a claim arises at a distinct point in time and is effectively complete as of that date, because the challenged provisions were allegedly adopted improperly at a distinct point in time, and complete and adequate relief was available to the plaintiff during the following three years.  Having held that the plaintiff’s claim accrued when the challenged provisions were adopted nine years earlier, the Court concluded that the plaintiff had presumptively delayed unreasonably in bringing its claims outside the three-year limitations period and the company presumptively would be prejudiced if forced to defend the lawsuit.~~The Court therefore reversed the trial court’s decision on timeliness and vacated the trial court’s order implementing its rulings on the parties’ cross-motions for summary judgment.~~Takeaways~~All parties to stockholder or investors’ rights agreements containing corporate-governance provisions should consider reviewing or revisiting those agreements in light of not only the Delaware General Assembly’s authorization of such provisions in Section 122(18) of the DGCL, but also the Delaware Supreme Court’s decision in this case, to determine whether any modification may be warranted.  As always, Gibson Dunn is here to help.~~[1] See Moelis & Co. v. West Palm Beach Firefighters’ Pension Fund, — A.3d –, No. 340, 2024 (Del. 2025) (the “Opinion”).~~The following Gibson Dunn lawyers participated in preparing this update: Colin B. Davis, Jonathan D. Fortney, Julia Lapitskaya, Jason J. Mendro, Mark H. Mixon, Jr., and Russell Shapiro.~~Gibson Dunn lawyers are available to assist in addressing any questions you may have regarding these developments.  Please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any of the following leaders and members of the firm’s Capital Markets, Mergers & Acquisitions, Private Equity, Securities Litigation, and Securities Regulation & Corporate Governance practice groups:~~Capital Markets: Andrew L. Fabens – New York (+1 212.351.4034, afabens@gibsondunn.com) Hillary H. Holmes – Houston (+1 346.718.6602, hholmes@gibsondunn.com) Stewart L. McDowell – San Francisco (+1 415.393.8322, smcdowell@gibsondunn.com) Peter W. Wardle – Los Angeles (+1 213.229.7242, pwardle@gibsondunn.com)~~Mergers & Acquisitions: Robert B. Little – Dallas (+1 214.698.3260, rlittle@gibsondunn.com) Saee Muzumdar – New York (+1 212.351.3966, smuzumdar@gibsondunn.com) George Sampas – New York (+1 212.351.6300, gsampas@gibsondunn.com)~~Private Equity: Richard J. Birns – New York (+1 212.351.4032, rbirns@gibsondunn.com) Ari Lanin – Los Angeles (+1 310.552.8581, alanin@gibsondunn.com) Michael Piazza – Houston (+1 346.718.6670, mpiazza@gibsondunn.com) John M. Pollack – New York (+1 212.351.3903, jpollack@gibsondunn.com)~~Securities Litigation: Colin B. Davis – Orange County (+1 949.451.3993, cdavis@gibsondunn.com) Jonathan D. Fortney – New York (+1 212.351.2386, jfortney@gibsondunn.com) Monica K. Loseman – Denver (+1 303.298.5784, mloseman@gibsondunn.com) Brian M. Lutz – San Francisco (+1 415.393.8379, blutz@gibsondunn.com) Jason J. Mendro – Washington, D.C. (+1 202.887.3726, jmendro@gibsondunn.com) Mark H. Mixon, Jr. – New York (+1 212.351.2394, mmixon@gibsondunn.com) Craig Varnen – Los Angeles (+1 213.229.7922, cvarnen@gibsondunn.com)~~Securities Regulation & Corporate Governance: Elizabeth Ising – Washington, D.C. (+1 202.955.8287, eising@gibsondunn.com) Thomas J. Kim – Washington, D.C. (+1 202.887.3550, tkim@gibsondunn.com) Julia Lapitskaya – New York (+1 212.351.2354, jlapitskaya@gibsondunn.com) Lori Zyskowski – New York (+1 212.351.2309, lzyskowski@gibsondunn.com)~~© 2026 Gibson, Dunn & Crutcher LLP.  All rights reserved.  For contact and other information, please visit us at www.gibsondunn.com.~~Attorney Advertising: These materials were prepared for general informational purposes only based on information available at the time of publication and are not intended as, do not constitute, and should not be relied upon as, legal advice or a legal opinion on any specific facts or circumstances. Gibson Dunn (and its affiliates, attorneys, and employees) shall not have any liability in connection with any use of these materials.  The sharing of these materials does not establish an attorney-client relationship with the recipient and should not be relied upon as an alternative for advice from qualified counsel.  Please note that facts and circumstances may vary, and prior results do not guarantee a similar outcome.~~Download PDF~~

Jan 26

7 min