Explore a real M&A case where a seller’s risk-laden exit plan crumbled as the buyer defaulted on payments. Gain insights into the legal dispute and learn valuable lessons on safeguarding transactions. M&A Stories December 07, 2020 Introduction: Selling a business…
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Buyer’s Post-Closing Default Shatters Seller’s High-Risk Exit Plan
Posted in Guaranty, securing buyer's note, securing deferred purchase price, security agreement, seller carried purchase price Tagged with: asset purchase agreement, buyer's owner liability, collateral, Legal dispute, LLC, M&A, post-closing default, Purchase Price, risk management, seller's exit plan
Seller of pressure washer business had to go an extra mile to recover unpaid purchase price from buyer
For thirty-two years, Seller owned and operated Midwest Cleaning Systems, a northeast Iowa business that sold and serviced pressure washers and cleaning equipment. For the last thirty years, the business sold and serviced Alkota brand equipment. When Seller decided to…
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- reliance
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- rescission
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- retention bonus
- revenue and profit projections
- reverse termination or breakup fee
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- risk of post closing payments
- royalty
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- sale of assets of business
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- sale of product line
- sales order
- sales tax
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- Section 1377 election
- Section 363 sale
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- securing deferred purchase price
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- seller owners equity interest in buyer
- seller ownership in buyer
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- seller's unemployment experience rating
- seller's warranty claims
- seller's workers compensation experience rating
- Selling shareholders problem with their board of directors
- 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
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- 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
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- supply problems
- survival of covenants
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- tangible net worth
- target's stock options
- tax
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- tax deferred reorganization
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- Taxation
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- third party
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- time of the essence
- timely objection to indemnification claim
- tolling
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- 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
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- 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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