January 10, 2020 Introduction Acquisition documents often have a forum selection clause. And like any provision ambiguity can invite a dispute if litigation breaks out after the closing. The deal The seller was a manufacturing company located in Butler County,…
Blog Archives
No Seller Indemnification Obligation to Buyer for Recall of Pre-Closing Product
December 19, 2019 Introduction The buyer of a manufacturing company runs the risk of having to repair or replace a product made by the seller before the closing. One risk is the cost of a recall of a product line…
Buyer’s Indemnification Claim Notice Tolled 1 Year Contractual but Not 3 Year Statutory Limitations Period
December 11, 2019 Introduction The buyer of a privately held business often has a deadline to make an indemnification claim for the breach of a seller representation and warranty. This survival period in an acquisition agreement often expires sometime from…
Monthly Financial Statements Not Covered by Financial Representation Covered by Books & Records Representation
Introduction In mergers and acquisitions agreements, the seller generally represents and warrants that the target’s financial statements for its most recent fiscal year and its most recent interim financial statements are accurate and complete, consistent with operations, and prepared in…
Posted in books and records rep and warranty, financial representation and warranty Tagged with: M&A stories, M&A tips, monthly financial statements
Court Rules That EY Earnout Calculation Was Arbitration Not Expert Determination
Introduction There are often post-closing calculations that must be made in an M&A deal. Examples are working capital and earnout calculations. Often the parties agree in advance to a dispute resolution procedure in the M&A documents in the event there…
ESOP Bank Trustee & Owner Must Pay $6.5 Million Purchase Price Overpayment to ESOP
Introduction One exit strategy for a business owner is to sell your company to an ESOP; especially if there are no serious buyers. However, those transactions are highly regulated by the federal government and must be done right. The deal…
Posted in capitalization of cash flow, discounted cash flow or DCF, independent trustee, projections, prudence, sale of business to ESOP, valuation Tagged with: M&A stories, M&A tips, overpayment
Business Buyer Loses Claim for $8 Million of Nonrenewed Customer Contracts
Introduction A crucial part of a potential business buyer’s due diligence is evaluating the seller’s projections. However, those projections often do not materialize, and disappointing projections do not usually amount to a breach of the seller’s acquisition agreement representations and…
Posted in customer and supplier rep, full disclosure rep, MAE rep, projections, representations and warranties Tagged with: M&A stories, M&A tips
Buyer Loses Dispute with Asset Seller Over Responsibility for Deal’s Sales Tax
Introduction The language used in an M&A deal matters. In a post-closing dispute, the lawyers and judges look to the language of the M&A document to resolve the dispute. And sometimes, the language will work against what a party thought.…
Posted in allocation of sales tax from transaction, asset purchase agreement Tagged with: M&A stories, M&A tips, sales tax imposed on buyer
Court Greenlights Business Seller’s Fraud Lawsuit Over Earnout Dispute
Introduction Disappointing earnout deals are common. The deal This deal involved the stock acquisition of the target, a legal analytics company by a competitor. The price was $9 million cash plus a $3 million earnout potential. The earnout was based…
Court Holds That $12 Million Merger Termination Fee Payment Not Exclusive Remedy
Introduction It is common in M&A deals for the seller to have the right to terminate an agreement by paying a significant termination fee; especially as part of a fiduciary out structure. The deal This case involves players in the…
Recent Posts
- Ambiguous APA Forum Selection Clause Did Not Waive Right to Remove to Federal Court
- No Seller Indemnification Obligation to Buyer for Recall of Pre-Closing Product
- Buyer’s Indemnification Claim Notice Tolled 1 Year Contractual but Not 3 Year Statutory Limitations Period
- Monthly Financial Statements Not Covered by Financial Representation Covered by Books & Records Representation
- Court Rules That EY Earnout Calculation Was Arbitration Not Expert Determination
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- hinder, delay or defraud
- hiring seller's employees
- implied covenant of good faith and fair dealing
- implied warranty of merchantability
- indemnification
- indemnification cap
- indemnification for pre-closing product loss
- independent trustee
- inequitable
- insider
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- integration clause
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- leases
- leases
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- merger
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- misleading personal financial statement
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- multi-employer pension plan
- mutual mistake
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- No Undisclosed Liabilities
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- note payment amount adjustment
- notice
- notice provision
- officer or director's fiduciary duty to disclose
- offset or setoff provision
- offset right
- overly complicated language in contract
- owner liability for company breach of financing deal
- percentage of purchase price
- personal goodwill
- personal guaranty
- personal guaranty of company debt by selling shareholder
- personal guaranty of lease
- Personal Name
- piercing veil of acquisition subsidiary
- post asset purchase issues
- post closing covenants
- post signing asset valuation
- preservation of due diligence materials
- prior-material-breach doctrine
- private equity
- product line exception
- projections
- projections
- promissory note
- prudence
- public information exclusion
- punitive damages
- purchase agreement
- purchase price
- purchase price adjustment
- purchase price reduction
- quality of earnings assessment
- ratifying unassumed contract by post-closing action
- reasonably equivalent value
- receipt of buyer equity or security
- receipt of buyer equity or security
- reformation
- reformation of contract
- reliance
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- representations and warranties
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- rescission
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- revenue and profit projections
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- sale leaseback
- sale of assets of business
- sale of business to ESOP
- sale of product line
- Section 363 sale
- securing buyer's note
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- security agreement
- seller owners equity interest in buyer
- seller ownership in buyer
- seller rep of no federal employer liability
- seller's age discrimination claims
- seller's covenants
- seller's federal injunctions
- seller's unemployment experience rating
- seller's warranty claims
- seller's workers compensation experience rating
- severance benefits
- sexual harassment
- shareholder buyout of partner
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- sharing transaction tax deduction benefits
- specific performance
- state approval of nonprofit hospital
- statute of limitations
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- strategic acquisition
- strategic acquisition
- subordination
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- survival of covenants
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- target's stock options
- tax benefit sharing
- Taxation
- termination of M&A agreement
- termination or breakup fee
- third party beneficiary clause
- timely objection to indemnification claim
- tolling
- tolling
- tort misrepresentation in M&A
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- transferee liability for taxes IRC Section 6901
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- UCC search
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- Uniform Fraudulent Transfer Act or Uniform Voidable Transfer Act
- union fringe benefits
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- unjust enrichment
- valuation
- value added tax or VAT
- waiver of contractual provision
- waiver of removal to federal court
- waiver provision
- willful breach carveout
- Withholding Post-closing payments
- working capital adjustment
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