Monthly Archives: July 2021

“Trust Is the Coin of the Realm.” Investors Sue Biopharmaceutical Founder for Securities Fraud.

Court finds investors allegations plausibly suggest that founder knew that a statement he made to investors that its flagship pain product held the “highest” commercial potential in terms of profitability was not true.  M&A Stories July 29, 2021 Introduction There

Posted in federal securities fraud, scienter, stock purchase agreement, tying fraud to economic loss

Good Example Why Fraud Should be Excluded from M&A Indemnification Cap

Court Permits Claim Against Seller of Target for Fraudulent Concealment M&A Stories July 28, 2021 Introduction It is common in an acquisition agreement to cap the seller’s obligation to indemnify the buyer for a seller breach of its acquisition agreement

Posted in fraud carveout, indemnification cap Tagged with: ,

Buyer of Business Does Not Have to Wait to Be Sued Before Seller Must Defend the Buyer Against a Defective Product Claim

Pennsylvania trial and intermediate court of appeal rejects seller’s argument that its obligation to indemnify and defend the buyer is only triggered by a lawsuit, not a claim. M&A Stories July 27, 2021 Introduction One of the risks a buyer

Posted in duty to defend, indemnification Tagged with: ,

Seller of Company Awarded $75 Million for Buyer Breach of Reps and Warranties

Buyer promised the seller of an insurance company that it had no problems with state insurance regulators. The buyer in fact had problems and the deal did not close. M&A Stories July 27, 2021 Introduction The typical acquisition agreement has

Posted in buyer has no regulatory problems, buyer representations and warranties, seller knowledge Tagged with: ,

Delaware Court Orders Buyer to Complete Purchase of Target Despite Pandemic

Buyer had remorse after onset of pandemic and took steps to blame its lenders for its refusal to close. M&A Stories July 25, 2021 Introduction There are some M&A deals where the parties have a deferred closing, meaning that the

Posted in best efforts to secure financing, buyer's covenants, Covenants, specific performance Tagged with: ,

Business Seller’s Management Liability Policy Covered Buyer’s $17 Million Negligent Misrepresentation Claim

Policy’s breach of contract exclusion did not apply to a claim made by a business buyer against the seller for making negligent misrepresentations during M&A negotiations because the claim was based upon a tort and not a breach of the

Posted in breach of contract exclusion, claim against seller's liability insurance, insurance coverage Tagged with: ,

Business Asset Buyer’s Purchase May Have Included Founder’s Publicity Rights

California intermediate appellate court holds that the asset purchase agreement’s acquisition of all the seller’s assets, including intellectual and intangible property, may have included the right to use the founder’s name and story to market the buyer’s brands. M&A Stories

Posted in Right of publicity Tagged with: ,

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