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…
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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
Seller of company can sue Buyer for making oral fraudulent and negligent misrepresentations
Seller’s Owner founded Seller in 2002. Seller was based out of the greater Sacramento, California area. In 2007, Seller began doing business as BenefitsCONNECT. BenefitsCONNECT is an online benefits enrollment and administration system that connects employer groups, insurance carriers, third…
Israeli pharma buyer’s fraud claim against seller of Mexican pharma company tossed out by court
In 2015, Buyer, an Israeli pharma company purchased Target, a Mexican pharmaceutical company, from Sellers, and the intellectual property used by Target from a Sellers affiliate. The total sale price came to $2.3 Billion. After the closing, Buyer claimed that…
No fraud in alleged buyer’s financial misrepresentations concerning buyer’s equity received by seller of company
Seller was two related companies, one, a provider of litigation support and e-discovery services and the other, a provider of temporary legal staffing to law firms and corporations. Seller along with Seller Affiliate, a related company providing various litigation support…
Buyer of business loses misrepresentation claim against seller because claim was not based upon seller’s breach of contract
Madison, Wisconsin based Target, is a contract manufacturer of custom vitamin and trace mineral premixes and value-added branded feed ingredients for the animal feed market. Seller was Target’s president and Buyer its vice-president. Both shared in Targets’ day-to-day operations, and…
Court said it may be reasonable for business buyer to rely on seller oral representation about competition
Target, based out of the Kansas City area, provides movie theater digital marketing/advertising and movie theater concessions. Sellers were the owners of Target. Buyer is a Texas capital investment limited liability company. In early 2015, Sellers circulated a solicitation seeking…
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…
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…
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,…
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