Monthly Archives: May 2018

Court awards buyer damages for seller’s breach of noncompetition covenant in 3D printing industry

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:

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. 

Posted in mutual mistake, net working capital adjustment, reformation of contract

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

Posted in federal employment discrimination liability, successor liability

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

Posted in hiring seller's employees, third party beneficiary clause

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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