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…
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Business Seller Can’t Break Delaware Forum Selection Clause
Introduction This case demonstrates how hard it is for a party to an M&A agreement to get out of the forum selection clause. The deal The buyer was a Georgia based Delaware company providing nationwide accounts receivable and revenue cycle…
Posted in forum selection clause Tagged with: connections to forum, enforcing forum selection clause, public policy interest of forum state
APA Integration Provision and Exclusive Remedy Clause Bars Seller Claim
Introduction A seller of a mortgage service business could not sue its asset buyer in tort for negligent misrepresentation. The deal The seller was a Denver based company that was formed after the 2008 financial crisis to assess and verify…
Posted in earn out, economic loss doctrine, exclusive remedy, integration clause Tagged with: asset purchase agreement, entire agreement, promise not representation
Court Restricts Company Seller’s Nationwide Noncompete to 3 States
Introduction The sale of a company usually comes with its goodwill. In fact, in many cases goodwill is the crown jewel of the business. The last thing a buyer wants, is to pay top dollar for the business only to…
Posted in boilerplate provisions, California, choice of law provision, Delaware, noncompete area, reformation Tagged with: California noncompetes, choice of law provision, noncompete area
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 breach of covenants, seller's breach of representations and warranties, waiver in writing, waiver of breach
S Corp Stock Seller Can Sue Buyer for Not Closing Tax Books Mid-year
Introduction An S corporation does not pay federal corporate income tax. The S corporation passes its income, deductions and credits through to its shareholders, in proportion to their ownership interest in the S corporation. The shareholders then pay income tax…
Posted in allocation of preclosing taxes refunds and credits, boilerplate provisions, further assurance provision, Internal Revenue Code Section 1377 election, purchase agreement, stock purchase agreement Tagged with: S corporation, section 1377 election, short taxable year, stock purchase agreement
Seller of company can sue Buyer for making oral fraudulent and negligent misrepresentations
Seller’s Owner founded Seller in 2002. Seller was based out of the greater Sacramento, California area. In 2007, Seller began doing business as BenefitsCONNECT. BenefitsCONNECT is an online benefits enrollment and administration system that connects employer groups, insurance carriers, third…
Buyer of business can’t stop release of escrowed funds to seller, because buyer did not follow the escrow agreement’s notice provision
Seller held a number of consumer debt accounts in Puerto Rico. Seller first approached Buyer about a possible sale of Seller’s debt accounts sometime in 2013 and, later that year, the parties entered into discussions. The accounts consisted of auto loans,…
Maryland court enforces boilerplate forum selection clause in confidentiality and noncompetition agreement against spouse and related companies of signatory
Buyer is a group of related Maryland companies founded in 1976 and has its world headquarters in Taneytown, Maryland (an hour NW drive from Baltimore). Buyer provides service and makes products in the commercial HVAC, industrial process, power, and industrial…
Court won’t enforce claimed oral modification of stock purchase agreement
Target is a San Diego, California late stage cell therapy company developing laboratory equipment and cell therapies to treat a variety of medical conditions. Cell therapy is taking cells from a donor and putting them into a patient to treat…
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