Monthly Archives: September 2022

DELAWARE COURT REJECTS MEDICAL DEVICE SELLERS’ EARNOUT CLAIM

The Delaware Court of Chancery holds that the buyer of the medical device used “good faith” and “commercially best efforts” to commercialize the sellers’ medical device. M&A Stories September 29, 2022 Introduction Deals involving the acquisition of an unproven medical

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BUYER OF BUSINESS ASSETS HAD COVERAGE FOR PRE-CLOSING ASBESTOS CLAIM UNDER PURCHASED SELLER’S GENERAL LIABILITY INSURANCE POLICY EVEN THOUGH CARRIER DID NOT CONSENT TO ASSIGNMENT

State intermediate Wisconsin court held that carrier’s consent in an anti-assignment policy does not apply to assignment of coverage for pre-closing losses. M&A Stories September 27, 2022 Introduction Buying the assets of a business often includes purchase of the seller’s

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UNSECURED CREDITORS CHALLENGE $36 MILLION PRE-BANKRUPTCY FORECLOSURE SALE OF PRIVATE LABEL SNACK MAKER

The seller’s unpaid creditors contend that other potential strategic partners were willing to pay between $42 million and $51 million for the seller. M&A Stories September 26, 2022 Introduction Selling a distressed business involves unique risks for the seller’s owner

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BUYER OF PRODUCT LINE FIGHTS WITH SELLER OVER MEANING OF NET SALES IN A $1.7 MILLION EARNOUT DISPUTE

Buyer claims that earnout is based upon the post-closing net sales of seller’s small box chassis products. The seller claims that earnout includes net sales of small box chassis products acquired by buyer from other sellers. M&A Stories September 20,

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SELLERS OF MEDICAL DEVICE COMPANY FAIL TO MAKE EARNOUT CLAIM THAT BUYER DID NOT USE “COMMERCIALLY REASONABLE EFFORTS” IN COMMERCIALIZING SELLERS’ MEDICAL DEVICE

An Indiana federal court concludes that sellers’ allegations of twenty-one buyer post-closing actions and inactions did not diverge “from the level of efforts, expertise, and resources applied by” the buyer “in the ordinary and usual course of its business.” M&A

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BUYER OF HOSPITAL CAN’T RECOVER DAMAGES FOR CONDITION OF HOSPITAL BECAUSE IT WAS PURCHASED “AS IS”

A Pennsylvania federal court holds that a “hospital cannot be sold ‘as is’ while simultaneously representing compliance with the rules, regulations, or requirements that govern the hospital’s physical condition. M&A Stories September 14, 2022 Introduction Buying a business “as is”

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IN EARNOUT DISPUTE, BUYER OF OIL AND GAS DRILLING TOOL MAKER HAD NO OBLIGATION TO USE BEST EFFORTS TO COMMERCIALIZE SELLER’S TOOLS

Houston federal court holds that under Texas law, the buyer had no implied obligation of good faith and fair dealing to seller’s owner to use best efforts to commercialize drilling tool line the buyer purchased from the seller. M&A Stories

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BUYER OF RESTAURANT ASSETS FIGHTS FORMER SELLER EMPLOYEE WAGE AND HOUR CLAIMS

Federal court dismissed claims of former seller employees against buyer of restaurant assets because employees did not allege in their complaint that buyer had been aware of wage and hour problems at the restaurant or the inability of the seller

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BUYER OF PHYSICIAN PRACTICE LOSES PURCHASED MEDICAL INSURANCE RECEIVABLES TO SELLER CREDITOR

The court held that the seller creditor could garnish the receivables because the buyer’s ownership of them would not vest until the buyer had received its license from the state of Florida M&A Stories September 2, 2022 Introduction The buyer

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