(Corrects company name to Nixon Peabody in paragraph one)

MAC clauses, or protections against “material adverve changes” in a company’s health or future prospects, have favored buyers over the past year, according to a survey by law firm Nixon Peabody LLP.
 
“There is little doubt that the current economic crisis is impacting how deals are being structured and approached. We have seen buyers increasingly walk away from signed M&A deals,” said Philip Taub, partner and practice group leader of Nixon Peabody’s private company transactions group.
 
“As the potential for litigation rises, striking the delicate balance between specificity in the exceptions and breadth of the MAC provisions and adding to the already high level of negotiation becomes imperative for a successful deal,” Taub said.
    
The survey found that 70 percent of M&A deals included a MAC exception for “changes in general conditions of the specific industry,” down from 75 percent last year 
    
Sixteen percent included a MAC exception for “changes in interest rates,” down from last year, according to the survey, which looked at 528 deals forged between June 1, 2007 and May 31, 2008.
    
Among those deals, only 27 percent of agreements surveyed contained the MAC exception for “changes in interpretation of laws by courts or government entities,” marking a 5 percent decrease from the prior year.
 
“It remains to be seen whether the buyer-friendly trend will continue or whether sellers can use the lack of attractive deal flow to demand more MAC exceptions in an effort to obtain more certainty of closure,” said Dominick DeChiara, partner and practice group leader of Nixon Peabody’s Private Equity group.