Herakles holding Cerberus.

Cerberus Capital Management takes its name from a mythical critter — a dog with three heads.  Plus a serpent for a tail.  Cerberus and other hellhounds guarded the gates of, well, Hades.  They let souls in but not back out.  Kind of a Hotel California thing.

You might think that a moniker like that would give fair warning to people aspiring to do business with it.  Apparently not.  Per the WSJ, merger candidate United Rentals feels "sorely disappointed" that CCM wants to renegotiate its agreement to buy the company for $4 billion — or walk away from the deal upon payment of a measly $100 million "Parent Termination Fee".

Blawgletter doesn’t blame United Rentals for its disappointment, but we do wonder whether its lawyers read section 8.2(e) of the Agreement and Plan of Merger before suing the fictional canine’s namesake in Delaware.  In that section, United Rentals agreeds that its "sole and exclusive" remedy for CCM’s backing out will consist of getting the centimillion smackers.  In case of doubt, it adds (with our emphasis):

In no event, whether or not this Agreement has been terminated pursuant to any provision hereof, shall Parent, Merger Sub, Guarantor or the Parent Related Parties, either individually or in the aggregate, be subject to any liability in excess of the Parent Termination Fee for any or all losses or damages relating to or arising out of this Agreement or the transactions contemplated by this Agreement, including breaches by Parent or Merger Sub of any representations, warranties, covenants or agreements contained in this Agreement, and in no event shall the Company seek equitable relief or seek to recover any money damages in excess of such amount from Parent, Merger Sub, Guarantor or any Parent Related Party or any of their respective Representatives.

United Rentals thus appears to have set for itself a Sisyphean task.  How appropriate.

Barry Barnett

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