Monthly Archives: March 2021

DOL sues Target Directors for Breach of Fiduciary Duties in ESOP Transaction

DOL claims that independent ESOP trustee overpaid for the majority owner’s stock and sued the company’s directors for breach of fiduciary duty.  The purchase price was 2.5 times higher than the prior 5 years ESOP valuations. M&A Stories March 29,

Posted in director liability, independent trustee, sale of business to ESOP

Court Permits Mere Continuation Successor Liability Claim Against Buyer

Buyer purchased assets of seller for cash including a distributor agreement. Buyer did not assume any liability for seller’s breach of the distributor agreement. The court nevertheless permitted distributor to sue the buyer for breach of the distributor agreement for

Posted in mere continuation, mere continuation exception, successor liability Tagged with: ,

Target Incorrectly Applies New Accounting Standard – May Cost Buyer $38 Million

Target’s estimate of tangible net worth at closing for purposes of a purchase price adjustment was $38 million too low because it was based upon an incorrect application of a new accounting standard. Buyer has uphill fight to avoid making

Posted in purchase price adjustment, tangible net worth Tagged with: ,

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