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Managing Legal M&A Risk When Buying Intellectual Property

Buyer purchased copyrights to albums that were previously subject to an oral deal with a record company, only to discover that buyer only purchased 50% of the copyright rights to the recordings  M&A Stories August 23, 2021 Introduction Buying a

Posted in co-author, copyrights, due diligence, oral copyright agreement Tagged with: ,

Tax Due Diligence May Save Buyer Time and Money in Stock Acquisition

Buyer of business was told by target owner that all taxes had been paid prior to the signing of the stock purchase agreement. Buyer ends up paying significant pre-closing target tax liabilities after closing and suing target owner for fraud.

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Buyer Can’t Sue Seller for Not Telling Buyer About Pending Loss of Major Customer

M&A Stories December 10, 2020 Introduction It is very important for a prospective buyer of a business to do smart due diligence to validate the purchase price. However, there is always a risk that the seller won’t tell you the

Posted in contracts, due diligence, extra-contractual fraud, fraud in business sale, non-reliance clause Tagged with: ,

Business Buyer’s Owner Loses Trademark to Competitor and Ends Up in Bankruptcy

M&A Stories December 08, 2020 Introduction You have to kick the tires of a business you want to buy. That includes asking whether the target’s tradename infringes upon a competitor’s tradename. The deal This deal involved the sale of the

Posted in copyrights, due diligence, patents, trademark infringement, trademarks Tagged with: ,

Business Buyer’s Suit Against Seller is Hampered by Missing Due Diligence Binder

Introduction Buying a company has many legal risks for a buyer. One of the most important tools to manage the risks of buying a business is to conduct a thorough due diligence investigation of the company. The deal This case

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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 your 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

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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: , ,

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