Monthly Archives: August 2021

M&A Buyer’s Failure to Get Closing Extension Ends Up in a Seller Terminated Deal

The asset purchase agreement gave the seller the right to terminate the asset purchase agreement if the FCC did not consent to the sale before a deadline. The seller’s termination of the deal 6 months after the deadline was valid.

Posted in equitable estoppel, termination of M&A agreement Tagged with: ,

Court Holds That Buyer of Assets of Business Did Not Include a Service Vendor Contract

Under the asset purchase agreement, the buyer only acquired specifically identified contracts. This did not include the service vendor contract. The result? The buyer’s claim against the service vendor was thrown out of court. M&A Stories August 26, 2021 Introduction

Posted in asset purchase, asset purchase agreement, Description of business assets purchased Tagged with: ,

All Cash Buyer of Assets of Business Has No Products Liability as Successor

The asset buyer had not assumed this liability in the asset purchase agreement and no common ownership or officer director management between buyer and seller. M&A Stories August 26, 2021 Introduction A buyer of the assets of a business can

Posted in all cash deal, asset purchase, continuity of ownership, de facto merger exception, mere continuation, mere continuation exception, product line exception, successor liability Tagged with: ,

Asset Buyer of Bankrupt Film Company Acquired Production Agreement Free of Pre-Closing Liabilities

Court holds that the production agreement was a non-executory contract because the producer’s post-closing obligations were not material. M&A Stories August 25, 2021 Introduction A buyer of a distressed business out of bankruptcy faces rules not found outside of bankruptcy.

Posted in bankruptcy sale, buying distribution business, distressed business acquisitions, executory contracts, Section 363 sale Tagged with: ,

Auto Dealership Acquisition Fails Because Buyer Slow to Process Franchise Application

Court holds that the seller had right to terminate the transaction when the buyer failed to process the franchise consent process within the time required by the asset purchase agreement. M&A Stories August 25, 2021 Introduction Deadlines in an M&A

Posted in termination of M&A agreement, time of the essence, waiver provision Tagged with: ,

Managing Legal M&A Risk When Buying Intellectual Property

Buyer purchased copyrights to albums that were previously subject to an oral deal with a record company, only to discover that buyer only purchased 50% of the copyright rights to the recordings  M&A Stories August 23, 2021 Introduction Buying a

Posted in co-author, copyrights, due diligence, oral copyright agreement Tagged with: ,

Court Holds that Asset Buyer Purchased Seller’s Unrecorded Construction Lien

The buyer purchased all business assets other than expressly excluded assets, and the construction lien was not described as an excluded asset.  M&A Stories August 10, 2021 Introduction Often the sale of a business is structured as an asset sale.

Posted in Description of business assets purchased Tagged with: ,

Offer to Purchase Franchisee’s Business Not Bona Fide Under Franchise Agreement Because of Earnout

California intermediate appellate court holds that offer was not bona fide. The earnout disqualified the offered purchase price from being “in a dollar amount.”  M&A Stories August 09, 2021 Introduction Buying a business from a franchisee involves additional issues and

Posted in approval of franchisor, bona fide offer, earnout, franchise sale Tagged with: ,

California Based M&A Buyer Successfully Resists Litigating Post-Closing Dispute in Florida

A forum section clause in a share purchase agreement might have deterred Florida sellers of stock in a Tennessee company from suing a California based buyer that is a Delaware corporation in a Florida court.  M&A Stories August 04, 2021

Posted in forum selection clause Tagged with: ,

Delaware Supreme Court Reverses $82 Million Fraud Award Against M&A Seller

“I meant what I said, and I said what I meant.” Delaware high court holds that stock purchase agreement indemnification fraud carveout was limited to deliberate fraud, not recklessness.  M&A Stories August 02, 2021 Introduction It is common in M&A

Posted in deliberate fraud carveout, exclusive remedy, fraud carveout Tagged with: ,

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