M&A Stories December 15, 2020 Introduction A buyer of a business usually manages unknown M&A risks by requiring the seller to provide a comprehensive set of representatives and warranties about the business. But occasionally, the buyer agrees to an “as…
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Trust but Verify-Business Seller Failed to Verify Accuracy of Earnout Statement
Introduction A buyer and seller of a business often use an earnout when they can’t agree upon a purchase price. In that case, the purchase agreement provides for a buyer calculation of the earnout amount, along with an earnout dispute…
Bootstrapping Doctrine No Bar to Business Buyer’s Fraud Claim
Introduction A buyer of a closely held business often has limited recourse against a seller if the deal turns out bad. Even if fraud is involved, the buyer must run the gauntlet of indemnification cap, survival period, exclusive remedy, non-reliance,…
Posted in bootstrapping doctrine, exclusive remedy, fraud carveout, fraud in business sale, non-reliance clause Tagged with: bootstrapping doctrine
Franchise Buyer’s Fraud Claim Bars Seller’s Summary Collection of Note
Introduction It can be easy for a creditor to obtain a judgment against a debtor that has defaulted on payment of a promissory note. Essentially all the creditor must do is produce the signed note and prove nonpayment. But not…
Fraud carve out saves buyer in “as-is where-is” in divestiture
Seller manufactures over-the-counter pharmaceutical products. On June 17, 2016, it sold one of its product lines to Buyer. The terms of that sale were memorialized in an asset purchase agreement. At the time of the sale, there was a class action suit…
Posted in "as is where is", fraud in business sale Tagged with: economic loss doctrine, fraud and breach of contract claims, fraud carve out
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