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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: , ,

Court Finds No De Facto Merger in Purchase of Bankrupt’s Intangibles-IP

Introduction Buyers of manufacturing businesses must always assess product liability risks. Even when buying the assets of the business as opposed to the stock (or LLC membership interests). The deal Here, the manufacturing company in this case made lathes. It

Posted in asset purchase agreement, de facto merger exception, successor liability Tagged with: , ,

Court Says That Buyer of Business Not Likely to Win Trade Secret Suit

Introduction A buyer of a business sued the seller’s owner to stop him from competing against the owner’s old business. The deal This case involved the sale of a seafood distribution business. The seller was a San Francisco based organic

Posted in asset purchase agreement, trade secret misappropriation by former seller employee Tagged with: , ,

Franchise Buyer’s Fraud Claim Bars Seller’s Summary Collection of Note

Introduction It can be easy for a creditor to obtain a judgment against a debtor that has defaulted on payment of a promissory note. Essentially all the creditor must do is produce the signed note and prove nonpayment. But not

Posted in asset purchase agreement, fraud in business sale, promissory note, rescission Tagged with: ,

Franchisee’s Fight with Franchisor Costs It a Sale of its Franchise

Introduction This is a story of a broken deal: a sale of a restaurant franchise that did not happen because of a dispute with the franchisor. The deal The case here involved a franchise for seven Tim Hortons restaurants located

Posted in approval of franchisor, asset purchase agreement, franchise sale, integration clause, no oral modifications of contract Tagged with: ,

Bankruptcy Court Permits 363(f) Sale of Business Free of Pension Claim

Introduction A pension plan unsuccessfully tried to stop a company from selling a business to a buyer in a 363(f) (3) sale free and clear of the seller’s pension fund liability. The deal The seller was engaged in environmental and

Posted in asset purchase agreement, bankruptcy sale, distressed business acquisitions, federal multiemployer pension plan withdrawal liability, Section 363 sale, successor liability Tagged with: , , , , ,

Beer Maker May Have Liability for Denying Consent to Sale of Wholesaler’s Business

Introduction Exclusive distributor relationships with manufacturers are usually the most important assets of a distributor business. The manufacturer is usually much bigger and has most of the leverage; leading to contracts that favor the manufacturer. Also, the manufacturer is most

Posted in asset purchase agreement, Assignment, assignment of contracts, consent to assignment Tagged with: , , , ,

Owner Sells Company’s Fitness Club Assets; Fights Personal Trainer Claims

Introduction Selling your company can be very stressful for employees and contractors not picked up by the buyer. Especially those that have depended upon cash flow from you company for a long time. This creates a risk you may be

Posted in asset purchase agreement, assignment of contracts, contracts, due diligence Tagged with:

Asset Buyer Fights Customer Claim Based Upon Unassumed Seller Contract

Introduction A buyer and seller agree to a price for the sale of the seller’s company. Then the buyer gets his or her adviser involved to iron out the details. One of those details is whether the transaction will be

Posted in asset purchase agreement, assignment of contracts, assumed liabilities, assumption of a contract, consent to assignment, due diligence Tagged with: , , ,

Seller Argues That Indemnification Cap Applies to Excluded Liabilities

Introduction An advantage of an asset sale is that a buyer can pick and choose which seller liabilities the buyer wants to be responsible for under the asset purchase agreement; often referred to as the assumed liabilities. However, the buyer

Posted in asset purchase agreement, excluded or retained liabilites, indemnification cap, post closing covenants Tagged with: , , , ,

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