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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: , , , ,

Business Buyer and Seller Battle over Indemnification Cap Language

Introduction Over the years sellers of businesses have often been able to limit their risk of post-closing indemnification claims from the buyer using indemnification caps, deductibles and threshold provisions in purchase agreements. It is quite common for a buyer to

Posted in indemnification cap, percentage of purchase price Tagged with: , ,

Seller loses $12.7 million jury verdict on appeal for damages for potential buyer’s claimed breach of confidentiality provision in letter of intent

In 2010, Seller was an integrated design and manufacturing company specializing in the development, production, installation, repair, and servicing of heavy equipment for use by offshore energy companies in the Gulf Coast region. Seller was founded in 2002 and employed

Posted in damages, diminuation of value, lost profits, nondisclosure agreement, nondisclosure provision, strategic acquisition, strategic acquisition

Israeli pharma buyer’s fraud claim against seller of Mexican pharma company tossed out by court

In 2015, Buyer, an Israeli pharma company purchased Target, a Mexican pharmaceutical company, from Sellers, and the intellectual property used by Target from a Sellers affiliate. The total sale price came to $2.3 Billion. After the closing, Buyer claimed that

Posted in compliance with all applicable laws, extra-contractual fraud, fraud in business sale, indemnification cap, representations and warranties

Signing closing documents before closing acquisition results in costly litigation

In 2016, the parties negotiated a stock purchase agreement by which Seller would sell Target, a car dealership, to Buyers and another colleague in two phases. First, Buyers and their colleague were to purchase 21% of Target for $500,000 cash.

Posted in breach of contract, closing, damages, specific performance, stock purchase agreement

Buyer of business strikes out after protracted litigation trying to recover lost profit damages from seller

Buyer wanted to enter the annual $5 billion revenue back-to-school season market for the sale of school supplies. Since Buyer needed inventory, licenses, and retailer relationships to get the ball rolling, it decided to buy the stationery division at Seller,

Posted in breach of contract, commercially reasonable efforts, Covenants, damages

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