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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

Sellers of company receiving stock of buyer could not sue buyer’s owners for federal securities fraud omissions committed during negotiation

This dispute stems from a written purchase agreement between Sellers and Buyer. Under this agreement, Sellers sold their interest in their technology consulting company, Target, to Buyer. In the summer of 2012, Sellers began marketing their company for sale. Shortly

Posted in anti-reliance clause, fraud in business sale, full disclosure rep, reliance

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

Buyer’s fraud claim failed because buyer did not allege facts that seller intentionally or recklessly omitted material facts from a stock purchase agreement disclosure schedule

Target, a 100% subsidiary of Seller, owned and operated an open—pit gold mining operation in Colorado. At some point prior to November 2014, Seller’s general counsel and another senior executive knew that a third party allegedly acquired the mineral interests

Posted in fraud in business sale, fraudulent intent, fraudulent omission

Delaware court holds that buyer of specialty chemical business can sue seller for misrepresenting the environmental liabilities of the business

Target’s business is making specialty chemicals. Its business was originally operated as an American subsidiary of a German based company. Ultimately, Target became the owner of the business. The owners of Target will be referred to as Shareholder. The owners

Posted in extra-contractual fraud, fraud in business sale, fraudulent omission

Risk of earn-outs in sale of RV business

Buyer, with headquarters in Wichita, Kansas, is in the business of providing services and products to companies in the recreational vehicle (`RV”) industry. Target is based in the greater Dallas-Fort Worth area and specializes in manufacturing and selling window shades

Posted in anti-reliance clause, earn outs, fraud in business sale

Court permits buyer of insurance claims adjusting firm to sue seller for fraudulently describing its relationship with its biggest insurance company customer

In 2010, Buyer, a Texas based insurance-claims-adjusting firm owned and operated by Larry, was looking to expand. With the help of an investment banking firm, Buyer identified California-based Seller, also an insurance-claims-adjusting firm, as a potential acquisition target. Seller was

Posted in fraud in business sale

Court holds that buyer of business can’t sue the seller for fraudulent misrepresentations made in the target’s data room

The buyer is a leading creator of the graphics used in live television broadcasts and in other media, with offices around the world. The target creates graphics and other media for high schools, colleges, and professional sports teams in their

Posted in anti-reliance clause, fraud in business sale

Delaware court holds that owner of a buyer of business assets cannot escape liability for fraudulent statements made outside of the asset purchase agreement

The buyer wanted to acquire the seller’s business. The seller was interested in selling its assets to the buyer but was worried about the buyer’s ability to finance the purchase price; especially since a large portion of the purchase price

Posted in fraud in business sale, integration clause

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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