May 22, 2020 Introduction This deal is a reminder that a seller of a business needs to read the transactional documents (with the help of a competent lawyer) before signing. In this case it cost the seller $14.5 million. The…
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Owner Loses $14.5 Million Fraud Claim Against Majority Shareholder in Stock Deal
Posted in fraud in business sale, fraudulent inducement, shareholder release Tagged with: M&A stories, M&A tips, read before signing
Court Greenlights Business Asset Buyer’s Fraudulent Inducement Claim Re 2-Year Noncompete Term
Introduction Sometimes being a good guy in an M&A deal can come back to bite you. If the buyer’s allegations are true, then this feels like a no good deed goes unpunished story. The deal Here, both the buyer and…
Posted in covenant not to compete, fraudulent inducement, noncompetition covenant term Tagged with: fraud in the inducement
Recent Posts
- SEC Sues Target Officers for Fraud, Seeking Millions of Dollars in Damages
- Judgment Against Buyer CEO for Lying to Target Is Nondischargeable in Bankruptcy
- Shareholder Can’t Challenge Board Merger Approval Because No Change of Control
- Target Shareholders Can’t Compel Target Law Firm to Disclose Merger File
- Buyer Waived Privileged Communications Shared with Target During Due Diligence
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- extra-contractual fraud
- F reorganization
- failure to make timely purchase price payment
- fair insider deal
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- fee based upon buyer debt assumption
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- for cause termination
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- form over substance
- forum non conveniens doctrine
- forum selection clause
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- fraudulent concealment
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- further assurance provision
- governmental approval
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- Guaranty
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- handshake redemption obligation
- hinder, delay or defraud
- hiring seller's employees
- implied assumption of seller contract/liability
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- indemnification cap
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- land use issues
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- leases
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- M&A agreement
- MAE rep
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- material
- material contracts
- material rep and warranty breach
- Medi-Cal provider agreements
- membership interest purchase agreement
- mere continuation
- mere continuation exception
- merger
- merger agreement
- midco transaction
- minority business participation program
- misappropriation of likeness
- misleading personal financial statement
- missing attachment to acquisition document
- modification as counteroffer
- multi-employer pension plan
- mutual mistake
- mutual mistake
- negligent misrepresentation
- net working capital adjustment
- New York
- no kickback or bribe rep
- no oral modifications of contract
- no pending government investigations or inquiries
- no solicitation of seller employees
- No Undisclosed Liabilities
- non-reliance clause
- nonbinding
- nonbusiness income/sale of subsidiary
- noncompete area
- noncompetition covenant term
- nondischargeable debt in bankruptcy
- nondisclosure agreement
- nondisclosure provision
- nonqualified preferred stock
- nonsolicitation of employees and customers
- note payment amount adjustment
- notice
- notice provision
- officer duty of care
- officer or director's fiduciary duty to disclose
- offset or setoff provision
- offset right
- One class of stock
- oral contract
- overly complicated language in contract
- owner liability for company breach of financing deal
- Ownership of Target Law Firm File
- parol evidence rule
- patents
- payroll tax
- percentage of purchase price
- personal goodwill
- personal guaranty
- personal guaranty of company debt by selling shareholder
- personal guaranty of lease
- Personal Name
- photo or image
- piercing veil of acquisition subsidiary
- post asset purchase issues
- post closing covenants
- post signing asset valuation
- post-closing sales tax
- PPP loan
- PPP loan assumption
- pre-closing management agreement
- pre-closing sales tax
- preservation of due diligence materials
- prior-material-breach doctrine
- private equity
- product line exception
- projections
- projections
- promissory estoppel
- 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
- recoupment doctrine
- reformation
- reformation of contract
- reliance
- remote use of trademark out of territory
- representation and warranty about customers
- representations and warranties
- rescission
- rescission
- retaliation
- retention bonus
- revenue and profit projections
- reverse termination or breakup fee
- Revlon doctrine
- Right of publicity
- risk of post closing payments
- royalty
- S corporation
- sale leaseback
- sale of assets of business
- sale of business to ESOP
- sale of product line
- sales order
- sales tax
- sales tax risk
- SBA approval re PPP loan
- Section 1377 election
- Section 363 sale
- securing buyer's note
- securing deferred purchase price
- security agreement
- seller carried purchase price
- seller owner responsibility for underreported sales tax
- seller owners equity interest in buyer
- seller ownership in buyer
- seller rep of no federal employer liability
- seller's age discrimination claims
- seller's covenants
- seller's federal injunctions
- seller's unemployment experience rating
- seller's warranty claims
- seller's workers compensation experience rating
- severance benefits
- sexual harassment
- shareholder approval of deal
- shareholder buyout of partner
- shareholder release
- sharing transaction tax deduction benefits
- sick time
- specific performance
- state approval of nonprofit hospital
- state franchise/income tax
- statute of frauds
- statute of limitations
- stay bonus
- step-down provision
- stock purchase agreement
- stock sale
- strategic acquisition
- strategic acquisition
- structure of transaction
- subordination
- substance over form
- substantially all assets
- success fee
- successor liability
- survival of covenants
- survival of reps and warranties
- target's stock options
- tax benefit sharing
- tax deferred reorganization
- tax penalties and additions
- Taxation
- termination of M&A agreement
- termination or breakup fee
- third party
- 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
- trademarks
- transferee liability for taxes IRC Section 6901
- transitory services contracts
- TRO/preliminary injunction before filing for arbitration
- tying fraud to economic loss
- typo or scriverner's error
- UCC search
- Uncategorized
- Uniform Fraudulent Transfer Act or Uniform Voidable Transfer Act
- union fringe benefits
- union liabilities
- unitary business
- unjust enrichment
- unliquidated or disputed claim
- unwanted assets
- vacation time
- 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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