Introduction There are unique risks for a buyer when purchasing a division of a seller (called a divestiture). It is easier to assess the quality of earnings of a stand alone business than with a division where costs must be…
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Buyer of Chemical Division Sues Seller for Understating Costs
Posted in divestitures, due diligence, quality of earnings assessment Tagged with: allocation of companywide costs, divestitures, quality of earnings
Business Buyer Risks Loss of Assets to Secured Creditor
Introduction Many companies put their assets up as collateral for financing. A buyer of a company needs to know this before buying the business. This risk is minimized in part by the seller representing and warranting in the purchase agreement…
No Sexual Harassment Successor Liability for Law Firm Asset Buyer
Introduction A buyer often prefers to purchase the assets of a company instead of its equity (such as stock of a corporation). One advantage of an asset purchase is that the buyer can avoid responsibility for the selling company’s liabilities;…
Seller of company not responsible for buyer’s post-closing failure to obtain electroplating permit
Seller was the owner of Target, a business located in Palo Alto, California that specializes in the electroplating of metal components for industrial use. On June 19, 2014, Seller executed a letter of intent to sell all of Seller’s shares…
Buyer can sue seller of urgent care centers for lost profits from Target’s alleged material breach of 3rd party payor contracts
Buyer is based in the greater Baltimore area and operates urgent care centers and clinics throughout central Maryland, Delaware, Pennsylvania, and Virginia. In January 2015, Buyer purchased Target from Seller, a physician. Target operated urgent care facilities in Pennsylvania. According…
No fraud in alleged buyer’s financial misrepresentations concerning buyer’s equity received by seller of company
Seller was two related companies, one, a provider of litigation support and e-discovery services and the other, a provider of temporary legal staffing to law firms and corporations. Seller along with Seller Affiliate, a related company providing various litigation support…
Court said it may be reasonable for business buyer to rely on seller oral representation about competition
Target, based out of the Kansas City area, provides movie theater digital marketing/advertising and movie theater concessions. Sellers were the owners of Target. Buyer is a Texas capital investment limited liability company. In early 2015, Sellers circulated a solicitation seeking…
Buyer of construction company obtains judgment against stock seller for target’s pre-closing noncompliance with minority business participation program
Seller and another shareholder, each owned 50% of Target, a large heavy construction company based in the New York City area. Buyer, a Spanish group of companies, purchased all of Target stock from the two shareholders pursuant to a stock…
Court finds that buyer of a California union skilled nursing facility had no constructive knowledge of seller’s multi-employer pension plan withdrawal liability
This is a follow up to a discussion of an earlier June court decision involving the same business buyer. http://www.mk-law.com/wpblog/buyer-of-a-california-union-skilled-nursing-facility-faces-multi-employer-pension-plan-withdrawal-liability-if-buyer-had-constructive-knowledge-of-the-potential-liability/ Buyer purchased a 99-bed skilled nursing facility located Santa Clarita, California from Seller through an asset purchase agreement that closed…
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…
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