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Business Buyer Recovers Damages for Seller Sufficiency of Assets Rep & Warranty Breach

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

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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

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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

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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: , , , , , , ,

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

Posted in breach of representations and warranties, financial representation and warranty, indemnification, indemnification for pre-closing product loss, MAE rep, No Undisclosed Liabilities, representations and warranties

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

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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: ,

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

Posted in asset purchase agreement, breach of representations and warranties, material rep and warranty breach, prior-material-breach doctrine, Withholding Post-closing payments Tagged with:

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: , , ,

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

Posted in asset purchase agreement, financial representation and warranty, membership interest purchase agreement, offset or setoff provision, offset right, promissory note, representations and warranties Tagged with: , ,

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