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Buyer May Pay $1.2 Million Twice for Seller Assets Subject to Financing Statement

Introduction One of the legal risks when purchasing a business is purchasing assets that are collateral for a loan. The deal This is a follow up to a deal where the buyer purchased the assets of a seller that made

Posted in due diligence, liens, UCC search Tagged with: , ,

Owner Sells Company’s Fitness Club Assets; Fights Personal Trainer Claims

Introduction Selling your company can be very stressful for employees and contractors not picked up by the buyer. Especially those that have depended upon cash flow from you company for a long time. This creates a risk you may be

Posted in asset purchase agreement, assignment of contracts, contracts, due diligence Tagged with:

Asset Buyer Fights Customer Claim Based Upon Unassumed Seller Contract

Introduction A buyer and seller agree to a price for the sale of the seller’s company. Then the buyer gets his or her adviser involved to iron out the details. One of those details is whether the transaction will be

Posted in asset purchase agreement, assignment of contracts, assumed liabilities, assumption of a contract, consent to assignment, due diligence Tagged with: , , ,

Buyer of Chemical Division Sues Seller for Understating Costs

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

Posted in divestitures, due diligence, quality of earnings assessment Tagged with: , ,

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

Posted in due diligence, liens, UCC search Tagged with: , ,

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;

Posted in actual knowledge, asset purchase agreement, constructive knowledge, due diligence, inequitable, retaliation, sexual harassment, successor liability Tagged with: , ,

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

Posted in Buyer beware, compliance with all applicable laws, due diligence, land use issues, representations and warranties, stock purchase agreement

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

Posted in Buyer beware, due diligence, economic loss doctrine, material contracts, representations and warranties

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

Posted in due diligence, fraud in business sale, material, receipt of buyer equity or security, receipt of buyer equity or security, reliance

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

Posted in anti-reliance clause, due diligence, extra-contractual fraud, negligent misrepresentation, reliance

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