Introduction This is another post-closing M&A dispute over an EBITDA earnout. The deal The seller was a San Jose based small security guard service. It sold its assets in September 2016 to a Georgia based nationwide security company with about…
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Lawsuit Over EBITDA Earnout “Determined in Accordance With Buyer’s Historical Reporting Policies”
Posted in bad faith, corporate overhead, de facto merger exception, earn outs, EBITDA Tagged with: corporate overhead in earnouts, EBITDA earnouts
Business Seller Accuses Buyer of Earnout Manipulation
Introduction A seller of a business wants to receive the highest price, and payable in cash at closing. The buyer might want to pay seller’s price but is not sure it is worth that much. How do you bridge the…
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- Buyer’s Indemnification Claim Notice Tolled 1 Year Contractual but Not 3 Year Statutory Limitations Period
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- hiring seller's employees
- implied covenant of good faith and fair dealing
- implied warranty of merchantability
- indemnification
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- independent trustee
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- No Undisclosed Liabilities
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- nondisclosure agreement
- nondisclosure provision
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- note payment amount adjustment
- notice
- notice provision
- officer or director's fiduciary duty to disclose
- offset or setoff provision
- offset right
- overly complicated language in contract
- owner liability for company breach of financing deal
- percentage of purchase price
- personal goodwill
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- personal guaranty of lease
- Personal Name
- piercing veil of acquisition subsidiary
- post asset purchase issues
- post closing covenants
- post signing asset valuation
- preservation of due diligence materials
- prior-material-breach doctrine
- private equity
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- projections
- projections
- promissory note
- prudence
- public information exclusion
- punitive damages
- purchase agreement
- purchase price
- purchase price adjustment
- purchase price reduction
- quality of earnings assessment
- ratifying unassumed contract by post-closing action
- reasonably equivalent value
- receipt of buyer equity or security
- receipt of buyer equity or security
- reformation
- reformation of contract
- reliance
- representation and warranty about customers
- representations and warranties
- rescission
- rescission
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- revenue and profit projections
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- sale of assets of business
- sale of business to ESOP
- sale of product line
- Section 363 sale
- securing buyer's note
- securing deferred purchase price
- security agreement
- seller owners equity interest in buyer
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- seller's warranty claims
- seller's workers compensation experience rating
- severance benefits
- sexual harassment
- shareholder buyout of partner
- shareholder release
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- specific performance
- state approval of nonprofit hospital
- statute of limitations
- stay bonus
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- stock purchase agreement
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- subordination
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- successor liability
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- target's stock options
- tax benefit sharing
- Taxation
- termination of M&A agreement
- termination or breakup fee
- third party beneficiary clause
- timely objection to indemnification claim
- tolling
- tolling
- tort misrepresentation in M&A
- tortious interference with prospective economic advantage
- trade secret misappropriation
- trade secret misappropriation by former seller employee
- trademark infringement
- transferee liability for taxes IRC Section 6901
- transitory services contracts
- tying fraud to economic loss
- UCC search
- Uncategorized
- Uniform Fraudulent Transfer Act or Uniform Voidable Transfer Act
- union fringe benefits
- union liabilities
- unjust enrichment
- valuation
- value added tax or VAT
- waiver of contractual provision
- waiver of removal to federal court
- waiver provision
- willful breach carveout
- Withholding Post-closing payments
- working capital adjustment
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