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Business Buyer’s APA Offset Rights Fund Its Environmental Legal Defense Costs

Introduction A buyer of a business likes offset rights. An offset right provision in a M&A purchase agreement gives the buyer the right to offset losses that it suffers that are the seller’s responsibility from post-closing payments that the buyer

Posted in environmental, indemnification, offset or setoff provision Tagged with: , , ,

Tolling of SPA Survival Period Didn’t Extend Delaware’s Statute of Limitations Period

Introduction It is common in M&A agreements to specify survival periods for making indemnification claims; and to toll the survival period while a timely indemnification claim is pending. However, although a survival period under Delaware law can shorten the applicable

Posted in extension by contract in Delaware, indemnification, statute of limitations, survival of reps and warranties, tolling Tagged with: , ,

Products Liability Indemnification Claim Against Former Owner Timely

Introduction A buyer of the stock of a company that makes products wants and often gets the stock seller to promise to pay for any products liability claims that pop up after the closing that relate to products made before

Posted in indemnification, statute of limitations, survival of covenants 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

Buyer of business not barred from pre-closing products liability indemnification because 2-year survival provision applied only to rep & warranty breach

Buyer (based 15 miles east of South Bend, Indiana) provides restraint systems for applications, including child seats, school buses, trucks, recreational and construction vehicles, and agricultural equipment. Target (based out of Oklahoma City) manufactures and supplies seat belts and seat

Posted in indemnification, survival of reps and warranties

Seller of lawn and garden business loses $8.6 million of escrowed purchase price because it made an untimely objection to buyer’s indemnification claim

The buyer purchased a lawn and garden business from the seller in February of 2015. Among the assets acquired were equipment and machinery to manufacture plastic pots, flats, trays and other items used to grow and sell plants. The condition

Posted in indemnification, timely objection to indemnification claim

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