Explore a case where a buyer halted payments in an M&A deal due to alleged financial inaccuracies, and learn about offset provisions in purchase agreements. M&A Stories March 29, 2019 Introduction: In the world of mergers and acquisitions, uncertainties loom…
Monthly Archives: March 2019
Buyer Halts Payments, Alleges Inaccurate Financials in M&A Deal
Posted in asset purchase agreement, financial representation and warranty, membership interest purchase agreement, offset or setoff provision, offset right, promissory note, representations and warranties Tagged with: Acquisition Agreements, books and records representation, Borremans v. Gardner, buyer protection, escrow, financial inaccuracies, Legal Case, M&A, Mergers and Acquisitions, New York State Court, offset or setoff provision, Purchase agreement, seller dispute
Buyer Misses Merger Deadline, Faces $126 Million Breakup Fee Battle
Explore a legal battle over a $126.5 million reverse breakup fee resulting from a missed merger deadline. Delve into the complexities of M&A agreements and antitrust issues. M&A Stories March 28, 2019 Introduction: In the world of business acquisitions, sellers…
Posted in extension of closing, implied covenant of good faith and fair dealing, merger, reverse termination or breakup fee, termination of M&A agreement, termination or breakup fee Tagged with: antitrust issues, Breakup Fee, Business acquisitions, contract disputes, Delaware Court of Chancery, extension of closing, implied covenant of good faith and fair dealing, M&A, Manfre v May, merger deadline, reverse termination fee
S Corp Stock Seller Can Sue Buyer for Not Closing Tax Books Mid-year
M&A Stories March 27, 2019 Introduction An S corporation does not pay federal corporate income tax. The S corporation passes its income, deductions and credits through to its shareholders, in proportion to their ownership interest in the S corporation. The…
Posted in allocation of preclosing taxes refunds and credits, boilerplate provisions, further assurance provision, Internal Revenue Code Section 1377 election, purchase agreement, stock purchase agreement Tagged with: S corporation, section 1377 election, short taxable year, stock purchase agreement
Asset Purchase Agreement Shields Buyer from Seller Employee Claim
Introduction You want to buy an existing business. You select your target business, a purchase price and payment terms. Now what? You talk to your accountant, lawyer or other adviser about how to do the deal. Your adviser asks you…
Posted in purchase agreement Tagged with: asset deal vs stock deal, risk management, seller employee claim against buyer
Shareholders Claim Buyer Forced Distressed Business into Bankruptcy
Introduction Buying a distressed competitor may be a smart business move. However, the means used to buy the business can have legal consequences. The deal This case involved a distressed Texas based glove maker that was a formerly a public…
Posted in purchase agreement Tagged with: bankruptcy, creditor's good faith, distressed business, force business into bankruptcy
Buyer Sues Business Seller for Bad Accounts Receivable
Introduction One of the problem assets in an acquisition can be the seller’s accounts receivable. A buyer may want to manage the risk of bad receivables by providing for a post-closing adjustment to the purchase price. The deal This case…
Buyer Loses $21.6 Million Claim for Business Seller’s Exclusivity Breach
Introduction One of the first documents that is often signed between a seller of a privately-owned business and a prospective buyer is a letter of intent. That document has a nonbinding description of the key terms of a business sale.…
Posted in purchase agreement Tagged with: exclusivity provision, expectancy damages, letter of intent, reliance damages
Court Gives Pharmacy Seller Chance to Collect Earnout
Introduction A prospective buyer and seller of a business often can’t agree upon a purchase price. One way to bridge the gap is to break down the purchase price into two pieces. A fixed amount and a contingent amount based…
Posted in purchase agreement Tagged with: earnout, gross profits target, implied covenant of good faith and fair dealing
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