The Delaware federal district court held that the purchase agreement’s requirement to submit earnout dispute to an independent accounting firm did not foreclose resolution of the matter by the court because the agreement’s language was only for expert determination and…
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SELLER OF BUSINESS FAILS TO FORCE EARNOUT DISPUTE TO BE RESOLVED BY AN ACCOUNTING FIRM
Posted in arbitration vs expert determination, problems with earnouts Tagged with: M&A stories, M&A tips
ADR Procedure Was Probably Arbitration and not an Expert Determination, Giving Delaware Chancery Court Jurisdiction
M&A Stories December 04, 2020 Introduction An acquisition often involves a post-closing purchase price adjustment reflecting the value of the net assets at closing. The parties often agree to submit any dispute over this calculation to an independent accounting firm.…
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…
Court Rules That EY Earnout Calculation Was Arbitration Not Expert Determination
Introduction There are often post-closing calculations that must be made in an M&A deal. Examples are working capital and earnout calculations. Often the parties agree in advance to a dispute resolution procedure in the M&A documents in the event there…
Purchase agreement required working capital dispute to be resolved by arbitration not expert determination
Seller is a Delaware corporation involved in the enterprise risk intelligence software business. On October 16, 2017, Seller and Buyer entered into an asset purchase agreement under which Buyer purchased substantially all of Seller’s assets. The asset purchase agreement provided for a…
Recent Posts
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- SELLER’S BREACH OF PURCHASE AGREEMENT: FAILURE TO TRANSFER PATIENT RECORDS
- SELLER OF RESTAURANT CHAIN ASSETS NOT LIABLE FOR PRE-CLOSING LEASE
- BUYER OF OCULAR ALLERGY TESTING SYSTEM BATTLES SELLER OVER EARNOUT
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- product line exception
- projections
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- prudence
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- punitive damages
- purchase agreement
- purchase price
- purchase price adjustment
- purchase price reduction
- quality of earnings assessment
- ratifying unassumed contract by post-closing action
- reasonably equivalent value
- receipt of buyer equity or security
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- receivables
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- reliance
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- seller carried purchase price
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- seller's covenants
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- seller's unemployment experience rating
- seller's warranty claims
- seller's workers compensation experience rating
- severance benefits
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- shareholder approval of deal
- shareholder buyout of partner
- shareholder personal guaranty of target lease
- shareholder release
- sharing transaction tax deduction benefits
- sick time
- signing LOI with revisions by signer
- specific performance
- state and local tax
- state approval of nonprofit hospital
- state franchise/income tax
- statute of frauds
- statute of limitations
- stay bonus
- step-down provision
- stock purchase agreement
- stock sale
- strategic acquisition
- strategic acquisition
- structure of transaction
- subordination
- substance over form
- substantially all assets
- success fee
- successor liability
- sufficiency of assets rep
- supply problems
- survival of covenants
- survival of reps and warranties
- tangible net worth
- target's stock options
- tax
- tax benefit sharing
- tax deferred reorganization
- tax penalties and additions
- Taxation
- termination of M&A agreement
- termination or breakup fee
- third party
- third party beneficiary clause
- time of the essence
- timely objection to indemnification claim
- tolling
- tolling
- tort misrepresentation in M&A
- tortious interference with prospective economic advantage
- trade secret misappropriation
- trade secret misappropriation by former seller employee
- trademark infringement
- trademarks
- transferee liability for taxes IRC Section 6901
- TRO/preliminary injunction before filing for arbitration
- tying fraud to economic loss
- typo or scriverner's error
- UCC search
- Uncategorized
- Uniform Fraudulent Transfer Act or Uniform Voidable Transfer Act
- union fringe benefits
- union liabilities
- unitary business
- unjust enrichment
- unliquidated or disputed claim
- unwanted assets
- vacation time
- valuation
- value added tax or VAT
- waiver of contractual provision
- waiver of jury trial
- waiver of removal to federal court
- waiver provision
- willful breach carveout
- willing buyer or procuring cause
- Withholding Post-closing payments
- working capital adjustment
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