Blog Archives

Court says asset buyer of business can sue seller for failure to disclose its union contract obligation

In this post-closing lawsuit, Unions comprised four jointly-managed multiemployer employee benefit plans. Seller was a Nebraska corporation which performed waterproofing, concrete and masonry restoration, and roofing services in Nebraska and the Midwest. Buyer was also a Nebraska corporation, performing commercial

Posted in due diligence, fraud in business sale, post asset purchase issues, representations and warranties, successor liability, union fringe benefits, union liabilities

New York federal court says dry cleaner asset buyer was not responsible for seller’s federal wage and hour liability

Seller was formed in 2007, which operated as a dry cleaning business in Manhattan that did business as Slayton Cleaners. Seller retained seven employees, including one front-desk attendant, one helper, two ironing persons, one spotter, one driver, and one tailor.

Posted in due diligence, federal wage and hour violations, successor liability

Seller of pressure washer business had to go an extra mile to recover unpaid purchase price from buyer

For thirty-two years, Seller owned and operated Midwest Cleaning Systems, a northeast Iowa business that sold and serviced pressure washers and cleaning equipment. For the last thirty years, the business sold and serviced Alkota brand equipment. When Seller decided to

Posted in buying distribution business, due diligence, securing deferred purchase price, security agreement

Court says that the buyer of the assets of two restaurants can sue the seller for damages for inflating sales revenue

This is the story of a buyer of the assets of two restaurants who finds post-closing sales are 60% of the restaurants historic performance as shown on the financial statements provided to the buyer by the seller. Non-relevant facts have

Posted in due diligence, fraud in business sale

Seller of business learns lesson about risks in an earn out

Today I want to talk about a seller of a business who learns how buyer’s problems can hurt his chances of receiving an earn out. Our story is drawn from a case that was tried before the nation’s oldest business

Posted in due diligence, earn outs, representations and warranties

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