Monthly Archives: October 2018

Buyer of business not barred from pre-closing products liability indemnification because 2-year survival provision applied only to rep & warranty breach

Buyer (based 15 miles east of South Bend, Indiana) provides restraint systems for applications, including child seats, school buses, trucks, recreational and construction vehicles, and agricultural equipment. Target (based out of Oklahoma City) manufactures and supplies seat belts and seat

Posted in indemnification, survival of reps and warranties

Court says buyer of assets of business can enforce noncompetition agreement seller had with former employee

Seller, based in Billerica, Massachusetts (20 miles NNW of Boston) manufactured computer peripheral equipment. Former Seller Employee started working at Seller in 1982. He was promoted several times over the course of his employment, eventually becoming program manager in the

Posted in Assignment, assignment of contracts, covenant not to compete

Court says buyer was barred from pursuing claim for seller breach of software representation by settling purchase price adjustment dispute

Buyer, a Jacksonville, Florida based insurance company, purchased Target, a Ft. Lauderdale, Florida based private insurance company and its subsidiaries from Seller pursuant to a stock purchase agreement. In the stock purchase agreement, Seller represented and warranted, that a software

Posted in book value adjustment, purchase price, purchase price adjustment

Court finds that a CEO of buyer had no duty to disclose speculative patent infringement litigation when CEO sold thermometer technology to buyer from CEO’s selling company

Buyer is a public company with its principal place of business in Lafayette Parish, Louisiana. Buyer, through its subsidiaries, engages in sale and distribution of medical devices; and sale of branded generic pharmaceutical drugs in the United States and the

Posted in doing deal with company's officer or director, officer or director's fiduciary duty to disclose

New York federal court says dry cleaner asset buyer was not responsible for seller’s federal wage and hour liability

Seller was formed in 2007, which operated as a dry cleaning business in Manhattan that did business as Slayton Cleaners. Seller retained seven employees, including one front-desk attendant, one helper, two ironing persons, one spotter, one driver, and one tailor.

Posted in due diligence, federal wage and hour violations, successor liability

Seller of pressure washer business had to go an extra mile to recover unpaid purchase price from buyer

For thirty-two years, Seller owned and operated Midwest Cleaning Systems, a northeast Iowa business that sold and serviced pressure washers and cleaning equipment. For the last thirty years, the business sold and serviced Alkota brand equipment. When Seller decided to

Posted in buying distribution business, due diligence, securing deferred purchase price, security agreement

Buyer of stock of title and escrow company can enforce noncompete and nonsolicitation provisions in target’s employment agreements

Target was a title and escrow company located in West Jordan, Utah (greater Salt Lake City area). Target’s Manager and Target’s COO/general counsel signed employment agreements with Target. Target’s Manager’s employment agreement, executed in August 2003, stated that she would

Posted in asset vs stock deal, covenant not to compete, nonsolicitation of employees and customers

Buyer of business can’t stop release of escrowed funds to seller, because buyer did not follow the escrow agreement’s notice provision

Seller held a number of consumer debt accounts in Puerto Rico. Seller first approached Buyer about a possible sale of Seller’s debt accounts sometime in 2013 and, later that year, the parties entered into discussions. The accounts consisted of auto loans,

Posted in escrow, fraud in business sale, notice provision, reliance

Buyer of company can’t offset its obligation to pay company pre-closing tax refunds to seller against buyer’s claimed larger indemnification claim against seller

Company is a gulf coast environmental remediation company. Buyer, an affiliate of private equity firm Halifax Group LLC, became interested in Company, which was then engaged in a profitable clean-up project. On March 31, 2014 Buyer purchased Company from Sellers

Posted in offset or setoff provision

Buyer’s fraud claim failed because buyer did not allege facts that seller intentionally or recklessly omitted material facts from a stock purchase agreement disclosure schedule

Target, a 100% subsidiary of Seller, owned and operated an open—pit gold mining operation in Colorado. At some point prior to November 2014, Seller’s general counsel and another senior executive knew that a third party allegedly acquired the mineral interests

Posted in fraud in business sale, fraudulent intent, fraudulent omission

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