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Prospective Buyer Had No Duty to Negotiate in Good Faith with Seller

Introduction Selling a business is an involved process. A prospective buyer first usually wants to see some basic financial information about the business. But before that happens, the seller often asks the prospective buyer to sign a confidentiality agreement. The

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Buyer Stops Post Closing Payments Because of Seller’s Prior APA Breach

Introduction A buyer of a company often discovers after the closing that he or she overpaid for the business. And many times, it is because the target company did not match up to seller’s purchase agreement representations and warranties. In

Posted in asset purchase agreement, breach of representations and warranties, material rep and warranty breach, prior-material-breach doctrine, Withholding Post-closing payments Tagged with:

Cash Buyer of Paper Mill Assets Not Liable for Seller’s CERCLA Liability

Introduction A company is responsible under the federal CERCLA or superfund law, and often state law for cleaning up property it contaminates by hazardous waste disposal. However, the buyer of the assets of the responsible company is generally not liable

Posted in asset purchase agreement, asset seller's liabilities, CERCLA or superfund liability, de facto merger exception, successor liability Tagged with: , , , ,

No Sexual Harassment Successor Liability for Law Firm Asset Buyer

Introduction A buyer often prefers to purchase the assets of a company instead of its equity (such as stock of a corporation). One advantage of an asset purchase is that the buyer can avoid responsibility for the selling company’s liabilities;

Posted in actual knowledge, asset purchase agreement, constructive knowledge, due diligence, inequitable, retaliation, sexual harassment, successor liability Tagged with: , ,

Buyer Didn’t Waive Seller Breach by Amending Asset Purchase Agreement

Introduction An acquisition of a company is sometimes done in one step: the buyer and seller sign a purchase agreement and immediately close the transaction on the same day.  This is called a simultaneous closing. Alternatively, the buyer and seller

Posted in asset purchase agreement, boilerplate provisions, breach of representations and warranties, breach of seller's covenants, deferred closing, representations and warranties, seller's covenants, waiver provision Tagged with: , , ,

Seller’s Insurance Broker Sued for Failing to Add Buyer as Loss Payee

Introduction It is not uncommon for the buyer of a business to be named as a loss payee on a seller insurance policy whether it be property, liability or business interruption coverage. As part of the process, the seller’s insurance

Posted in asset purchase agreement, certificate of insurance, insurance broker duty, insurance coverage, loss payee Tagged with: , ,

Company Buyer Stops Note Payments to Seller, Claims Inaccurate Books

Introduction A buyer of a business never knows for sure what it is getting until after the closing. How does a buyer minimize the risk of overpaying for a business? Well, in addition to kicking the tires (due diligence), the

Posted in asset purchase agreement, financial representation and warranty, membership interest purchase agreement, offset or setoff provision, offset right, promissory note, representations and warranties Tagged with: , ,

Seller of auto dealership franchise sues auto maker for violation of state’s auto dealer law regulating consent to franchise sales

Seller owned a GM automobile dealership in Pennsylvania since 1985. In 2016, Seller began exploring the sale of Seller’s assets to potential buyers. Seller subsequently began negotiations with Buyer, who owned and operated several GM dealership line-makes in the state. In

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Health club buyer fights with seller’s landlord over ownership of some health club assets

Seller operated a health club in Georgia. It leased the building from Landlord. Seller ended up in financial trouble, filed for bankruptcy and sold its assets out of bankruptcy to Buyer. Buyer did not lease Landlord’s building. After the closing,

Posted in asset purchase agreement Tagged with: ,

Seller of business had no contractual duty to indemnify buyer for asbestos claims

In 1993, Buyer purchased from Seller the business operations related to certain lines of fragrance and cosmetic products pursuant to an asset purchase agreement. Among the product lines Buyer purchased were talcum powder products, which later became the subject of

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