So much for a Cerberus/United Rentals settlement.

A day after United Rental’s shares popped on hopes of a kiss-and-make-up with Cerberus, the firm’s legendary founder and CEO pretty much quashed such speculation. (Though Day One is likely to end without much punch, the idea of the ’secretive,’ ‘reclusive’ Stephen Feinberg appearing in public offered some nice excitement).

First off, just by appearing in court at the allotted time, Feinberg signaled to the market that a press release with “settlement” in the headline was hardly imminent. The judge on Monday allowed the court proceedings to wait a day on the assumption that some sort of new agreement was getting hashed out. Not to be.

Second, Feinberg reiterated the firm’s stance that they’re on the hook for a $100 million big ones and that’s it. Underscoring the lack of understanding between the two sides, Feinberg had the following response when asked by URI attorney Richard Bernstein whether he knew RAM had to ’specifically perform.’

Feinberg replied: “I’m not sure of the legal definition of specific performance.”

That response is symbolic of how messy the agreement has become, and points to how much worse it could get. 
Specific performance is the part of the agreement that says:

“The parties have agreed that they shall be entitled to seek an injunction to prevent breaches of the merger agreement and to be able to enforce specifically the terms and provisions of the merger agreement, in addition to any other remedy to which such party is entitled at law or in equity, including the covenants of Parent or Merger Sub that require Parent or Merger Sub” to and so on and so on.

In short, specific performance is what URI sees as its ace in the hole, as far as getting Cerberus to go through with the deal is concerned. According to URI, the clause says that not only does Cerberus not have the right to terminate the deal, but that URI can force the firm to complete it.

On debt financing for the deal, the fair-haired, moustachioed Feinberg said on Tuesday: “The banks were giving us a hard time and they weren’t happy with funding it. There were a number of issues and conditions that were there. They were nervous in this tough financial environment.”

(Image credit. Alison Smith)