Monthly Archives: March 2020

Nondisclosure Covenant May Protect Purchased Customer Info Even if Not Trade Secret

March 31, 2020 Introduction A buyer of a business does not want the seller or its owner to compete against it after the closing. One tool to manage this risk is the have the seller (and owner) provide a covenant

Posted in customer list, customer list, nondisclosure agreement, trade secret misappropriation Tagged with: ,

APA Setoff Provision Applies Only to Liquidated Indemnification Claims

March 19, 2020 Introduction A buyer of a business often discovers problems with the business after the closing. And this risk is often covered by seller indemnification obligations. In some cases, the purchase price was paid at the closing and

Posted in offset or setoff provision Tagged with: ,

Seller Can’t Use LOI to Stop Buyer from Soliciting its Employees

March 12, 2020 Introduction Buyers and privately held sellers generally use letters of intent in business acquisitions. They primarily serve as a statement of the key business terms of the deal and are nonbinding. They also usually contain binding terms

Posted in letter of intent, modification as counteroffer, no solicitation of seller employees, nonbinding Tagged with: ,

Bankruptcy Court’s 363 Sale Order Binds Buyer Who Then Declined to Sign APA

March 11, 2020 Introduction There can be many advantages to buying a distressed business in a 363 bankruptcy sale, including purchasing the business assets free and clear of seller’s liabilities. However, a 363 purchase has some unique features: including the

Posted in bankruptcy sale, distressed business acquisitions, sales order, Section 363 sale Tagged with: ,

Asset Buyer Can’t Recoup its Stale Fraud-Breach Claims Against Earnout

March 10, 2020 Introduction It is not uncommon for a business buyer to find undisclosed problems in the acquired business after the closing; problems that the seller’s owner most certainly knew about. Nevertheless, the buyer often makes a business decision

Posted in earn out, earn outs, recoupment doctrine, statute of limitations Tagged with: ,

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