Buyer of manufacturing business discovers obsolete and malfunctioning equipment. Recovers damages from seller. M&A Stories September 5, 2021 Introduction Most acquisition agreements require the seller to represent and warrant that the assets purchased are sufficient to operate the business. This…
Blog Archives
Business Buyer Recovers Damages for Seller Sufficiency of Assets Rep & Warranty Breach
Posted in representations and warranties, sufficiency of assets rep Tagged with: M&A stories, M&A tips
Buyer Awarded Damages for Seller Product Design Representation & Warranty Breach
Buyer allocates time and expense to fix a product design problem identified by a customer M&A Stories September 3, 2021 Introduction Acquisition agreement representations and warranties are primarily designed to allocate risk between the buyer and the seller. The deal…
A Rep & Warranty Helped Buyer Recover Damages from Seller of a Manufacturing Business
Seller representation and warranty helped buyer recover loss for problems with product documentation M&A Stories September 2, 2021 Introduction Representations and warranties in a business purchase agreement are tailored to the business being purchased. For example, some provisions for…
Buyer of Assets of LLC Business Can Sue Seller LLC Member Personally for Seller Breach
February 28, 2020 Introduction Ordinarily the owner of corporation or LLC who sells the company’s assets is not personally liable to the buyer for his or her company’s asset purchase agreement obligations unless he or she signs the APA as…
Posted in alter ego, breach of contract, breach of representations and warranties, representations and warranties Tagged with: M&A stories, M&A tips, personal liability of LLC manager, personal liability of LLC member, tortious conduct of LLC manager, tortious conduct of LLC member, tortious conduct of owner, tortious conduct of shareholder
No Seller Indemnification Obligation to Buyer for Recall of Pre-Closing Product
December 19, 2019 Introduction The buyer of a manufacturing company runs the risk of having to repair or replace a product made by the seller before the closing. One risk is the cost of a recall of a product line…
Monthly Financial Statements Not Covered by Financial Representation Covered by Books & Records Representation
Introduction In mergers and acquisitions agreements, the seller generally represents and warrants that the target’s financial statements for its most recent fiscal year and its most recent interim financial statements are accurate and complete, consistent with operations, and prepared in…
Posted in books and records rep and warranty, financial representation and warranty Tagged with: M&A stories, M&A tips, monthly financial statements
Business Buyer Loses Claim for $8 Million of Nonrenewed Customer Contracts
Introduction A crucial part of a potential business buyer’s due diligence is evaluating the seller’s projections. However, those projections often do not materialize, and disappointing projections do not usually amount to a breach of the seller’s acquisition agreement representations and…
Posted in customer and supplier rep, full disclosure rep, MAE rep, projections, representations and warranties Tagged with: M&A stories, M&A tips
Buyer Stops Post Closing Payments Because of Seller’s Prior APA Breach
Introduction A buyer of a company often discovers after the closing that he or she overpaid for the business. And many times, it is because the target company did not match up to seller’s purchase agreement representations and warranties. In…
Buyer Didn’t Waive Seller Breach by Amending Asset Purchase Agreement
Introduction An acquisition of a company is sometimes done in one step: the buyer and seller sign a purchase agreement and immediately close the transaction on the same day. This is called a simultaneous closing. Alternatively, the buyer and seller…
Posted in asset purchase agreement, boilerplate provisions, breach of representations and warranties, breach of seller's covenants, deferred closing, representations and warranties, seller's covenants, waiver provision Tagged with: seller's breach of covenants, seller's breach of representations and warranties, waiver in writing, waiver of breach
Company Buyer Stops Note Payments to Seller, Claims Inaccurate Books
Introduction A buyer of a business never knows for sure what it is getting until after the closing. How does a buyer minimize the risk of overpaying for a business? Well, in addition to kicking the tires (due diligence), the…
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- boot
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- closing
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- contracts
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- copyrights
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- customer deposits
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- deferred closing
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- denial of consent must be reasonable
- dental practice sale
- Description of business assets purchased
- determination of purchase price adjustment
- diminuation of value
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- due diligence
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- earn outs
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- EBITDA
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- employment agreement
- employment agreement
- enforce against nonparty
- entire fairness
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- environmental problems
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- equitable contribution
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- escrow
- excluded liabilities
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- executory contracts
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- extra-contractual fraud
- F reorganization
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- fair insider deal
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- fee based upon buyer debt assumption
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- financing acquisition issues
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- for cause termination
- force majeure
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- form over substance
- forum non conveniens doctrine
- forum selection clause
- franchise sale
- fraud
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- fraud in business sale
- fraud in the inducement exception
- fraudulent concealment
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- further assurance provision
- further assurance provision
- governmental approval
- governmental approval of transaction
- Guaranty
- guaranty of related acquisition agreements
- handshake redemption obligation
- hinder, delay or defraud
- hiring seller's employees
- implied assumption of seller contract/liability
- implied covenant of good faith and fair dealing
- implied duty of good faith and fair dealing
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- indemnification
- indemnification cap
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- independent trustee
- inequitable
- insider
- insurance broker duty
- insurance coverage
- insurance requirements
- integration clause
- Intellectual Property
- Internal Revenue Code Section 1377 election
- investment banker/business broker
- joint venture
- judgement for intentional misrepresentation
- key employees of target
- land use issues
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- leases
- leases
- letter of intent
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- loss payee
- lost profits
- 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
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- misappropriation of likeness
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- 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
- 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
- nonsolicitation of former 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
- oral copyright agreement
- 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
- permits and certificates
- 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 adjustments for pre-closing sales and services
- post-closing sales tax
- PPP loan
- PPP loan assumption
- pre-closing management agreement
- pre-closing operating arrangement
- pre-closing sales tax
- preservation of due diligence materials
- prior-material-breach doctrine
- private equity
- Problem with distributors
- Problem with Investment Banker/Broker/Finder Fee
- problem with mandatory arbitration clause
- problem with prorations
- problem with purchase price adjustment
- problem with seller co-owners
- problem with seller contract
- Problem with seller lessor or landlord
- Problem with seller owner's competition
- Problem with Union Pensions
- Problem with Vendors and Suppliers
- Problems when business fails after closing
- Problems with Competitors
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- problems with creditors of distressed business
- problems with customers
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- Problems with Description of Assets
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- problems with receivables
- Problems with sale of auto dealerships
- problems with seller's employees
- Problems with seller's projections
- problems with subordination rights
- 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
- receivables
- 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 imposed on equity sale of DRE
- sales tax risk
- SBA approval re PPP loan
- scienter
- Section 1377 election
- Section 363 sale
- securing buyer's note
- securing deferred purchase price
- security agreement
- seller carried purchase price
- seller knowledge
- 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 personal guaranty of target lease
- shareholder release
- sharing transaction tax deduction benefits
- sick time
- signing LOI with revisions by signer
- specific performance
- state and local tax
- 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
- sufficiency of assets rep
- supply problems
- survival of covenants
- survival of reps and warranties
- tangible net worth
- target's stock options
- tax
- 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
- time of the essence
- 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
- 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 jury trial
- waiver of removal to federal court
- waiver provision
- willful breach carveout
- willing buyer or procuring cause
- Withholding Post-closing payments
- working capital adjustment
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