Both Michael Targoff and the special committee firmly stood behind “timing” as one of the primary reasons for narrowing their scope to a deal with MHR. Ironically, once they entered the negotiation process with MHR, they began to delay due to terms negotiations with MHR.

The original premise of considering MHR as the only alternative for financing was that the deal was expected to close in weeks.

“Despite it becoming clear that the MHR Financing was not going to be closed within the ‘one week for the MHR convertible preferred stock [compared] to eleven weeks for the rights offering’ that formed part of the basis for selecting the Financing from among the alternatives, the Special Committee never performed a serious market check of the financing alternatives. Instead, it was content to let King & Spalding, North Point, and Targoff haggle with MHR for more than four months.”

The court cited this as primary opportunity for the special committee to revisit alternatives. Instead, the special committee used this time to negotiate terms that the court found in its opinion to be in conflict with Revlon.