The story in this case serves as a reminder to a seller of a business, that giving the buyer your covenant not to compete is a serious undertaking. Here is the background of the lawsuit as described by the judge:…
Monthly Archives: May 2018
Court awards buyer damages for seller’s breach of noncompetition covenant in 3D printing industry
Posted in covenant not to compete
Court finds that seller of business may have violated an LOI exclusivity provision
This is story about how a company negotiating the sale of its business (the “seller”) ended up in court with the company interested in buying the business (the “buyer), over a provision in a letter of intent. In the words…
Posted in exclusivity provision, letter of intent
Buyer of equipment maker’s assets not liable for seller’s post-closing product liability claim
A buyer purchases the assets of a business, so that buyer can avoid the pre-closing liabilities of the seller. The buyer does that by picking and choosing the liabilities it wants to assume in the asset purchase agreement and leaving…
Posted in successor liability
Buyer of business could not challenge net working capital purchase price adjustment after agreeing to final net working capital amount
This is a lesson about using net working capital purchase price adjustments. In this case the buyer purchased the assets of a business from seller out of bankruptcy. The asset purchase agreement contained a net working capital purchase price adjustment. …
Buyer of car wash assets may be liable for seller’s federal employment discrimination liability
The buyer wanted to acquire the seller’s car wash business. The buyer conducted due diligence and learned that there was a federal employment discrimination claim pending before the U.S. Equal Employment Opportunity Commission (or “EEOC”). However, the buyer never received…
Asset buyer not liable for race discrimination claim for not hiring former seller employee because the former seller employee never had an employment relationship with buyer
This is the story of the purchase of a car dealership by a buyer who was sued for not hiring one of seller’s employees. Seller wanted buyer to take care of seller’s employees. Buyer agreed to include a provision in…
Court gives seller of business assets right to take business back because of buyer fraud
This case has the feeling of a Shakespearean tragedy. Roger and Shirley owned a business, which we will call Seller. They retired and turned management of Seller over to their son Jeffrey. Jeffrey ran the business as an officer of…
Posted in fraud in business sale, rescission
Buyer breach of required insurance provision in acquisition documents result in punitive damages
Today I want to talk about a lesson to learn from Danny, whose company (“Buyer”) purchased an RV business from Doug’s company (“Seller”). It was a simple deal. In March of 2013, Buyer purchased RV business assets from Seller. Buyer…
Posted in insurance requirements, punitive damages
Importance of boilerplate provisions in business purchase agreement – forum selection clause
Today I want to talk about how a boilerplate provision in an asset purchase agreement can be important when a post-closing dispute breaks out between the buyer and the seller. This example is drawn from a recent case involving the…
Posted in boilerplate provisions, forum selection clause
The risks of buying a business in chapter 11 as a stalking horse
Today I want to talk about the risks of buying a distressed business in a chapter 11 reorganization, as a stalking horse. It is the story of a buyer (which we will call “Buyer”) that spent substantial legal and other…
Posted in distressed business acquisitions
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