"I'll do my best."

We've all heard that line at one time or another.

In the high-stakes world of mergers and acquisitions, the corporate lawyers who draft the contracts that seal these deals are fond of a clause that requires the buyer to exercise "reasonable best efforts" to make sure the deal actually gets done.

Alliance Data Systems, the most recent hapless seller to turn to the Delaware Chancery Court after being left at the altar by a private equity buyer, will test the limits of that bit of legal jargon in a lawsuit it filed Wednesday afternoon. M&A lawyers say the company is facing an uphill battle.

Alliance, a credit-card processor, has sued Blackstone Group to force it to complete a $6.7 billion leveraged buyout deal inked last May, days after Blackstone told Alliance that conditions sought by the Office of the Comptroller of the Currency would impose "unlimited and indefinite liability."

In its complaint, Alliance alleges that the comptroller of the currency asked Blackstone to provide a maximum of $400 million in financial support for the World Financial Network National Bank, owned by Alliance. When Blackstone didn't respond to that alternative, according to the complaint, the agency asked for agreements "aimed at assuring the safe ongoing operation" of the bank.

"In violation of its covenants to use reasonable efforts and to act in good faith to obtain O.C.C. approval, Blackstone's response was to tell A.D.S. it intended to pick up its marbles and go home," says the lawsuit.

But just how far does Blackstone have to go to make sure the government approves this deal? That seems to be a wide open question, according to the cognoscenti of the M&A world.

Lawrence Hamermesh, a professor at Widener University School of Law in Wilmington, Delaware, said the term "reasonable best efforts" can probably be found in thousands of M&A contracts, but he could only find about 7 to 10 cases in the Delaware courts that even reference the term, much less make an effort to define it.

"How much do we have to sacrifice to use reasonable best efforts? I'm guessing it's going to be one of those highly contextual questions where there is no single answer," he says.

In its complaint, Alliance claims the regulator's request "was not a surprise" and that Blackstone, advised by Simpson Thacher & Bartlett "knew or should have known" that the government would "require a private equity group acquiring a bank through a thinly capitalized shell to provide such assurance for the Bank's safe ongoing operation."

But M&A lawyers seem to think Blackstone has a fair chance of walking away from this deal. "The issue in deal speak is whether the O.C.C. put a 'burdensome condition' on it approval," says one prominent corporate deal lawyer. "It's a very hard issue to assess in the abstract but I suspect in the current environment that Blackstone is very confident in its point of view."

James C. Woolery, a corporate partner at Cravath, Swaine & Moore, says there's law defining "best efforts" in contracts—meaning the buyer would have to do everything "except go bankrupt" to complete a deal. There is also law defining "reasonable efforts"—meaning you should "jog but not sprint."

In recent years, lawyers have split the baby and come up with "reasonable best efforts or "commercially reasonable" efforts. Questions often come up when the antitrust regulators impose conditions, such as the selling valuable assets that render the deal without profit, says Woolery.

In this context, Alliance could be facing a weak case, given the legal constructs of a leveraged buyout, in which a private equity firm creates a shell company—and only that shell is required to use reasonable best efforts to complete the deal.

"The idea of a financial guarantee is completely counter to the terms of a typical leveraged buyout contract, where the guarantee by the fund is very limited," Woolery says.

Stay tuned. If the case goes forward, expect testimony on the behind the scenes negotiations on what, exactly, the parties meant in last May, before the credit crunch, by "best."

by Karen Donovan