May 31, 2020 Introduction It is all too common for an acquired business to not perform as well as expected after the closing. But the fact that the target’s projections were inaccurate do not amount to a fraud claim. The…
Monthly Archives: May 2020
No Fraud for Positive Projections Proved Inaccurate in Hindsight
Posted in constructive fraud, federal securities fraud, fraud in business sale Tagged with: M&A stories, M&A tips, should have known
Creditor’s Post 363 Successor Liability Claim Thrown Out by Bankruptcy Court
May 27, 2020 Introduction There is more legal risk when buying a distressed business, especially the risk of post-closing claims against the buyer by seller’s creditors, under a successor liability theory. This risk can be substantially minimized if the buyer…
US Court Enforces SPA’s Purchase Price Adjustment Dispute Forum Selection Clause
May 24, 2020 Introduction Many business acquisitions have post-closing purchase price adjustments based upon the financial position of the target company at closing. The parties usually provide for a dispute resolution procedure for resolving disagreements over the final numbers, and…
Owner Loses $14.5 Million Fraud Claim Against Majority Shareholder in Stock Deal
May 22, 2020 Introduction This deal is a reminder that a seller of a business needs to read the transactional documents (with the help of a competent lawyer) before signing. In this case it cost the seller $14.5 million. The…
Posted in fraud in business sale, fraudulent inducement, shareholder release Tagged with: M&A stories, M&A tips, read before signing
Buyer in All Cash Stock Deal Fights Mere Continuation Successor Liability Claim
May 15, 2020 Introduction A buyer of the stock of an unrelated company for cash usually does not worry about being directly liable for the target’s liabilities. Perhaps that is not the case when purchasing the stock a distressed business.…
No CGL Coverage for $25 Million Fire Damage Claim to Business Assets Sold to Buyer
May 8, 2020 Introduction A seller of a business often is allocated legal risks of the sold business. This is accomplished through comprehensive purchase agreement representations and warranties and indemnification provisions. Such legal risks can turn out to be very…
Posted in CGL Policy, Duty to Defend Tagged with: CGL does not cover breach of contract claim, M&A stories, M&A tips
Business Asset Buyer Assumed Seller Contract by its Post-Closing Conduct
May 2, 2020 Introduction Buyers like to buy the assets of a business (as opposed to the company that runs the business) because it can pick and choose which seller contracts it wants to assume. Generally, a buyer would pick…
Posted in asset seller's liabilities, implied assumption of seller contract/liability Tagged with: M&A stories, M&A tips
Bankruptcy Court Approves 363 Sale of Business to Buyer Connected to Seller Insiders
May 1, 2020 Introduction A buyer of a distressed business often prefers to accomplish the transaction through the bankruptcy courts under a Bankruptcy Code Section 363 acquisition. One reason for this is that the buyer can generally purchase the assets…
Posted in buyer connected to seller insiders, distressed business acquisitions, Section 363 sale Tagged with: M&A stories, M&A tips
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- no kickback or bribe rep
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- projections
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- purchase price
- purchase price adjustment
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- ratifying unassumed contract by post-closing action
- reasonably equivalent value
- receipt of buyer equity or security
- receipt of buyer equity or security
- recoupment doctrine
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- reformation of contract
- reliance
- remote use of trademark out of territory
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- retention bonus
- revenue and profit projections
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