Introduction There are often post-closing calculations that must be made in an M&A deal. Examples are working capital and earnout calculations. Often the parties agree in advance to a dispute resolution procedure in the M&A documents in the event there…
Blog Archives
ESOP Bank Trustee & Owner Must Pay $6.5 Million Purchase Price Overpayment to ESOP
Introduction One exit strategy for a business owner is to sell your company to an ESOP; especially if there are no serious buyers. However, those transactions are highly regulated by the federal government and must be done right. The deal…
Posted in capitalization of cash flow, discounted cash flow or DCF, independent trustee, projections, prudence, sale of business to ESOP, valuation Tagged with: M&A stories, M&A tips, overpayment
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 Loses Dispute with Asset Seller Over Responsibility for Deal’s Sales Tax
Introduction The language used in an M&A deal matters. In a post-closing dispute, the lawyers and judges look to the language of the M&A document to resolve the dispute. And sometimes, the language will work against what a party thought.…
Posted in allocation of sales tax from transaction, asset purchase agreement Tagged with: M&A stories, M&A tips, sales tax imposed on buyer
Court Greenlights Business Seller’s Fraud Lawsuit Over Earnout Dispute
Introduction Disappointing earnout deals are common. The deal This deal involved the stock acquisition of the target, a legal analytics company by a competitor. The price was $9 million cash plus a $3 million earnout potential. The earnout was based…
Court Holds That $12 Million Merger Termination Fee Payment Not Exclusive Remedy
Introduction It is common in M&A deals for the seller to have the right to terminate an agreement by paying a significant termination fee; especially as part of a fiduciary out structure. The deal This case involves players in the…
Insolvent Nonprofit Hospital’s 363(f) Sale Was Free of a $305 Million Cost Imposed by CA AG
Introduction The sale of the assets of a nonprofit hospital in California requires the permission of the state’s attorney general. The deal This deal involves the Bankruptcy Code Section 363(f) sale of four California nonprofit hospitals in bankruptcy for $610…
Buyer to Indemnify Business Seller for 3rd Party Asbestos Claim Punitive Damages
Introduction Liability for asbestos claims is a common risk with manufacturing companies. Sophisticated buyers and sellers of manufacturing businesses are aware of the risk and usually manage it through an allocation between the buyer and the seller in the acquisition…
Posted in asbestos claims, indemnification, punitive damages Tagged with: indemnification for punitive damages, M&A stories, M&A tips
Business Buyer’s Suit Against Seller is Hampered by Missing Due Diligence Binder
Introduction Buying a company has many legal risks for a buyer. One of the most important tools to manage the risks of buying a business is to conduct a thorough due diligence investigation of the company. The deal This case…
Posted in preservation of due diligence materials Tagged with: due diligence materials, M&A stories, M&A tips, preservation of due diligence materials
Forum Selection Clause Enforced in Buyer Note Given in Acquisition of Company
Introduction A buyer of a company wants the purchase agreement to specify that a post-closing dispute will be litigated in a state or country convenient to it. Often both sides can agree that the most convenient forum is where the…
Posted in forum selection clause Tagged with: different forum selection clauses in purchase agreement and note, M&A stories
Recent Posts
- Court Rules That EY Earnout Calculation Was Arbitration Not Expert Determination
- ESOP Bank Trustee & Owner Must Pay $6.5 Million Purchase Price Overpayment to ESOP
- Business Buyer Loses Claim for $8 Million of Nonrenewed Customer Contracts
- Buyer Loses Dispute with Asset Seller Over Responsibility for Deal’s Sales Tax
- Court Greenlights Business Seller’s Fraud Lawsuit Over Earnout Dispute
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- "as is where is"
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- allocation of preclosing taxes refunds and credits
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- tort misrepresentation in M&A
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- valuation
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