Thus, the FDIC and Weatherford could have made their transaction retroactive, but they didn’t document the deal clearly enough to do so.
The appellate court then considered whether, assuming that the FDIC/Weatherford transaction was retroactively effective (which it wasn’t), the retroactivity of that transaction had any legal effect on the transaction between the FDIC and FH Partners.
Companies would simply wait for a period in which the company's stock price fell to a low and then moved higher within a two-month period.
The company would then grant the option but date it at or near its lowest point.
In this way, the exercise price of the granted option can be set at a lower price than that of the company's stock at the granting date.
In light of that fact, there is no evidence that the FDIC was authorized to unilaterally cure title defects months after closing.” Effectively backdating written agreements so that they’ll be enforceable retroactively can be surprisingly complicated.
This is especially true in the context of a complex deal that includes multiple documents and when the retroactive date is several months in the past.
The parties’ intent for the transaction to have retroactive effect must be clear.
Merely stating a retroactive effective date in the main agreement may not do the trick.