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US Court Enforces SPA’s Purchase Price Adjustment Dispute Forum Selection Clause

May 24, 2020 Introduction Many business acquisitions have post-closing purchase price adjustments based upon the financial position of the target company at closing. The parties usually provide for a dispute resolution procedure for resolving disagreements over the final numbers, and

Posted in arbitration vs expert determination, dispute resolution provision, forum selection clause, purchase price adjustment Tagged with: ,

Delaware Court Permits Business Buyer’s APA Breach and Fraud Claims Against Seller

April 24, 2020 Introduction Buying a business is risky. And buyers all too often find out after the closing that the business was not as represented in the data room, meetings, emails, messages, phone calls, or in seller’s acquisition agreement

Posted in damages, exclusive remedy, fraud carveout, indemnification cap Tagged with: , ,

Ambiguous APA Forum Selection Clause Did Not Waive Right to Remove to Federal Court

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,

Posted in forum selection clause, waiver of removal to federal court Tagged with: , , , ,

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

Posted in anti-reliance clause, earn outs, integration clause Tagged with: ,

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

Posted in exclusive remedy, fraud carveout, termination of M&A agreement, termination or breakup fee, willful breach carveout Tagged with: , , , ,

Forum Selection Clause Enforced in Buyer Note Given in Acquisition of Company

Introduction A buyer of a company wants the purchase agreement to specify that a post-closing dispute will be litigated in a state or country convenient to it. Often both sides can agree that the most convenient forum is where the

Posted in forum selection clause Tagged with: ,

Fraud Carve-Out in APA’s Exclusive Remedy Provision Saves Buyer’s Employee Non-Solicitation Claim

Introduction Most acquisition agreements provide that the agreement’s indemnification provisions are the exclusive remedy for a contractual breach. However, it is also common to exclude fraud claims from this excusive remedy provision. The deal This deal involved the acquisition of

Posted in boilerplate provisions, fraud carveout, hiring seller's employees, nonsolicitation of employees and customers Tagged with: ,

9th Circuit Holds APA’s Delaware Forum Selection Clause Contravened Strong Idaho Public Policy

Introduction Many buyers and sellers in M&A transactions like Delaware courts to handle their disputes because of the reputation for competence. Thus, it is common to see a Delaware forum selection clause in M&A agreements. Some parties to a deal

Posted in contravene strong state public policy, forum non conveniens doctrine, forum selection clause Tagged with: , ,

Bootstrapping Doctrine No Bar to Business Buyer’s Fraud Claim

Introduction A buyer of a closely held business often has limited recourse against a seller if the deal turns out bad.  Even if fraud is involved, the buyer must run the gauntlet of indemnification cap, survival period, exclusive remedy, non-reliance,

Posted in bootstrapping doctrine, exclusive remedy, fraud carveout, fraud in business sale, non-reliance clause 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: ,

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