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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

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

Posted in due diligence, minority business participation program, no pending government investigations or inquiries, representations and warranties, stock purchase agreement

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

Posted in asset seller's liabilities, constructive knowledge, due diligence, federal multiemployer pension plan withdrawal liability, multi-employer pension plan, post asset purchase issues, successor liability, union liabilities

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

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