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“No Harm No Foul” M&A Language Extended Time to Make Indemnification Claim

APA excused business buyer’s failure to make indemnification claim by expiration of the survival period because there was no “actual and material prejudice” to the seller. M&A Stories February 15, 2021 Introduction Agreements for the acquisition of private companies usually

Posted in escrow, excuse for untimely indemnification claim, indemnification Tagged with: ,

M&A Escrow Did Not Adequately Secure Risk of Seller Nonpayment of Foreign Taxes

Wednesday, July 1, 2020 Introduction A buyer of the assets of a business does not want responsibility for the income taxes that apply to seller’s gain from the transaction. So how can the buyer manage the risk of the taxing

Posted in escrow, foreign income tax Tagged with: ,

Seller’s indemnification for environmental remediation costs capped by escrow amount and note adjustment provision

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, environment representations and warranties, environmental remediation, escrow, indemnification, promissory note, purchase price reduction, stock purchase agreement

Stock sellers lose opening legal battle over buyer’s environmental claim

In November 2007, Sellers of Target agreed to sell Target to Buyer through a stock purchase agreement. When the sale closed in December 2007, Sellers placed $16.7 million into escrow to secure any post-closing claims that Buyer might assert. Target’s

Posted in environment representations and warranties, escrow, indemnification, representations and warranties

Delaware Court says that alleged material breach of stock purchase agreement by seller of target company does not excuse buyer from making post-closing payments to seller

On August 31, 2016, Buyer and Sellers entered into a stock purchase agreement in which Buyer agreed to purchase all of Sellers’ shares of Target stock for $93.5 million, subject to certain post-closing adjustments. The transaction closed on October 3, 2016.

Posted in escrow, offset or setoff provision, stock purchase agreement

Buyer of business can’t stop release of escrowed funds to seller, because buyer did not follow the escrow agreement’s notice provision

Seller held a number of consumer debt accounts in Puerto Rico. Seller first approached Buyer about a possible sale of Seller’s debt accounts sometime in 2013 and, later that year, the parties entered into discussions. The accounts consisted of auto loans,

Posted in escrow, fraud in business sale, notice provision, reliance

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