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:…
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S Corporation Stock Sale: Tax Implications You Shouldn’t Miss
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: IRC Section 1377 Election, Loss as of Closing Date, M&A legal blog, Purchase Agreement Clauses, Real-life Case Study, S Corporation Stock Sale, S Corporation Tax Basics, stock purchase agreement, Tax Advisor, Tax Consultation, tax implications
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: asset purchase agreement, Case Study, Corporate Structure, Employee Claims, Lawsuit, Legal Blog, Liability, M&A Transactions, risk management, stock purchase
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: bankruptcy, creditor's good faith, distressed business, force business into bankruptcy
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…
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: exclusivity provision, expectancy damages, letter of intent, reliance damages
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: earnout, gross profits target, implied covenant of good faith and fair dealing
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: court reformation of contract, mutual mistake, preclosing tax refunds, proration of taxes, typo
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: customer representation and warranty, federal securities fraud, key customers, reasonable reliance
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