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Business Buyer Pays Reasonably Equivalent Value Liable to Seller Lessor Under UFTA

Introduction One legal risk of buying a distressed business is having to pay a seller creditor for an unassumed APA liability even when the buyer paid fair market value for the business. The deal The buyer in this case was

Posted in hinder, delay or defraud, insider, reasonably equivalent value, successor liability, Uniform Fraudulent Transfer Act or Uniform Voidable Transfer Act Tagged with: , , , ,

Court Finds No De Facto Merger in Purchase of Bankrupt’s Intangibles-IP

Introduction Buyers of manufacturing businesses must always assess product liability risks. Even when buying the assets of the business as opposed to the stock (or LLC membership interests). The deal Here, the manufacturing company in this case made lathes. It

Posted in asset purchase agreement, de facto merger exception, successor liability Tagged with: , ,

7th Circuit Upholds 25% CERCLA Allocation to Innocent Business Buyer

Introduction Buying a business with CERCLA issues is fraught with risk. The buyer hopes that it can price the deal correctly; which includes an estimate of what if anything the buyer can recover from the actual polluter. The deal Here,

Posted in CERCLA or superfund liability, successor liability Tagged with:

Business Asset Buyer Wins Successor Liability Skirmish with Union

Introduction This is a continuing saga of a business asset buyer’s post-closing battle with a seller’s union. Chapter 1 is found in an earlier blog: The deal The seller and buyer both performed waterproofing, concrete and masonry restoration, and

Posted in actual knowledge, constructive knowledge, successor liability, union liabilities Tagged with: , , ,

CA Court of Appeals Dissent Invites CA High Court to Clarify 363(f) Asset Sales with Alad Product Liability Claims

Introduction A buyer of a manufacturer, distributor or retailer of products out of bankruptcy expects that it can acquire the business free and clear of product liability claims under section 363(f) of the bankruptcy code. The deal This case involved

Posted in bankruptcy sale, distressed business acquisitions, product line exception, sale of product line, Section 363 sale, successor liability Tagged with: , , , ,

Business Buyer Sues Seller for Undisclosed Poor Unemployment Insurance Experience Rating

Introduction An asset business buyer can sometimes see its post-closing unemployment or workers compensation insurance experience rating unexpectedly jump after acquiring a business. The deal In this case, a company with a normal New York unemployment insurance experience rating acquired

Posted in seller's unemployment experience rating, seller's workers compensation experience rating, successor liability, Uncategorized

Bankruptcy Court Permits 363(f) Sale of Business Free of Pension Claim

Introduction A pension plan unsuccessfully tried to stop a company from selling a business to a buyer in a 363(f) (3) sale free and clear of the seller’s pension fund liability. The deal The seller was engaged in environmental and

Posted in asset purchase agreement, bankruptcy sale, distressed business acquisitions, federal multiemployer pension plan withdrawal liability, Section 363 sale, successor liability Tagged with: , , , , ,

Lawsuit Over EBITDA Earnout “Determined in Accordance With Buyer’s Historical Reporting Policies”

Introduction This is another post-closing M&A dispute over an EBITDA earnout. The deal The seller was a San Jose based small security guard service. It sold its assets in September 2016 to a Georgia based nationwide security company with about

Posted in bad faith, corporate overhead, de facto merger exception, earn outs, EBITDA Tagged with: ,

Indiana APA Choice of Law Provision Doesn’t Apply to Its Product Line Exception

Introduction Generally, a cash buyer of the assets of a business is not responsible for the defective products made by the seller, unless the buyer assumed those liabilities in the asset purchase agreement. However, California started imposing the seller’s product

Posted in choice of law provision, product line exception, successor liability Tagged with: , , , , , ,

No Buyer De Facto Merger Successor Liability for Seller Debt

Introduction One risk in buying the assets of a business is being sued by a seller creditor for a seller liability that the buyer did not assume in the asset purchase agreement. This risk is much higher when buying all

Posted in all cash deal, de facto merger exception, seller ownership in buyer, successor liability Tagged with: , ,

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