Blog Archives

S Corporation Stock Sale: Tax Implications You Shouldn’t Miss

Explore the tax intricacies of S corporation stock sales in this informative M&A legal blog. Understand the implications, including IRC section 1377 elections, through a real-life case study. Gain insights for your M&A transactions. M&A Stories March 27, 2019 Introduction:

Posted in allocation of preclosing taxes refunds and credits, boilerplate provisions, further assurance provision, Internal Revenue Code Section 1377 election, purchase agreement, stock purchase agreement Tagged with: , , , , , , , , , ,

How an Asset Purchase Agreement Shields Buyers from Employee Claims

Explore the intricacies of asset and stock purchases in M&A transactions to effectively manage risks and protect personal assets. Learn from a real case study and understand the importance of asset purchase agreements. M&A Stories March 26, 2019 When you’re

Posted in purchase agreement Tagged with: , , , , , , , , ,

Shareholders Claim Buyer Forced Distressed Business into Bankruptcy

Introduction Buying a distressed competitor may be a smart business move.  However, the means used to buy the business can have legal consequences. The deal This case involved a distressed Texas based glove maker that was a formerly a public

Posted in purchase agreement Tagged with: , , ,

Seller Did Not Need Company Landlord’s Consent to Stock Deal

Introduction Real estate can be a major asset in a company. It is very common for a company to lease their offices, stores, manufacturing facilities and distribution centers. A buyer usually wants to use the company’s real estate. If buying

Posted in purchase agreement Tagged with: , , , , ,

Buyer Bought Target Employee’s Non-compete in Merger

Introduction A company’s relationship with its employees may be the crown jewel of the business. Often these relationships are evidenced by employment agreements which contain some form of post-employment nonsolicitation and non-competition covenants. Such provisions may not be enforceable in

Posted in purchase agreement Tagged with: , , , , ,

Buyer Sues Business Seller for Bad Accounts Receivable

Introduction One of the problem assets in an acquisition can be the seller’s accounts receivable. A buyer may want to manage the risk of bad receivables by providing for a post-closing adjustment to the purchase price. The deal This case

Posted in purchase agreement Tagged with: , ,

Buyer Loses $21.6 Million Claim for Business Seller’s Exclusivity Breach

Introduction One of the first documents that is often signed between a seller of a privately-owned business and a prospective buyer is a letter of intent. That document has a nonbinding description of the key terms of a business sale.

Posted in purchase agreement Tagged with: , , ,

Court Gives Pharmacy Seller Chance to Collect Earnout

Introduction A prospective buyer and seller of a business often can’t agree upon a purchase price. One way to bridge the gap is to break down the purchase price into two pieces. A fixed amount and a contingent amount based

Posted in purchase agreement Tagged with: , ,

Court awards business seller $441K in preclosing tax refunds

Introduction It is often common when selling your company to prorate any tax refunds that relate to the preclosing. Often the buyer of the company will agree to pay to the seller any such tax refunds that the target company

Posted in purchase agreement Tagged with: , , , ,

Business Seller’s Nondisclosure of Customer Problems Cost $4.4 Million

Introduction A buyer of a company often prices the target based upon some multiple of earnings. And a key assumption in its pricing model is often the stability of the target’s relationship with its key customers. So, a buyer will

Posted in purchase agreement Tagged with: , , ,

Recent Comments