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SEC Sues Target Officers for Fraud, Seeking Millions of Dollars in Damages

SEC accuses Target’s CEO and CTO of lying to the buyer about owning a game changing product and overstating the target backlog and pipeline. M&A Stories Taking the high road in M&A negotiations is good business: “It’s a rough road

Posted in fraud in business sale Tagged with: ,

Judgment Against Buyer CEO for Lying to Target Is Nondischargeable in Bankruptcy

Target principals’ judgement against Buyer CEO for fraudulently promising them buyer stock and royalties generated from post-merger sale of target products not dischargeable in Buyer CEO’s personal bankruptcy. M&A Stories Taking the high road in M&A negotiations is good business:

Posted in judgement for intentional misrepresentation, nondischargeable debt in bankruptcy Tagged with: ,

Shareholder Can’t Challenge Board Merger Approval Because No Change of Control

A shareholder could not sue his directors for accepting a merger proposal for a claimed lower price than offered by another suitor because each target shareholder was to exchange each target share of stock for 1/3rd cash and the other

Posted in Change of Control, Revlon doctrine Tagged with: ,

Target Shareholders Can’t Compel Target Law Firm to Disclose Merger File

Court says that the target law firm represented the target not the target shareholders in the merger, and the buyer acquired the target law firm files in the merger. M&A Stories January 8, 2021 Introduction The shareholders of an acquired

Posted in Ownership of Target Law Firm File Tagged with: ,

Buyer Waived Privileged Communications Shared with Target During Due Diligence

Court holds that buyer waived its lawyers’ privileged communication when shared during due diligence with the target. The buyer was trying to determine whether the proposed merger would trigger the target’s distribution agreement change of ownership provision and whether the

Posted in attorney client privilege, common interest doctrine Tagged with: ,

Seller’s CEO Can be Sued for Not Disclosing Buyer’s Unaudited Financials in Proxy

M&A Stories December 24, 2020 Introduction An officer owes a duty of care to his or her shareholders. This fiduciary duty of an officer is especially important when the directors have asked the shareholders to approve a proposed merger. The

Posted in officer duty of care, shareholder approval of deal Tagged with: ,

Buyer Can Sue Seller of Business in Delaware for Fraud in “As Is” Deal

M&A Stories December 15, 2020 Introduction A buyer of a business usually manages unknown M&A risks by requiring the seller to provide a comprehensive set of representatives and warranties about the business. But occasionally, the buyer agrees to an “as

Posted in "as is where is", fraud in business sale Tagged with: ,

Business Seller’s Post Closing Payments in Jeopardy by Covid and Buyer Owner’s Prison Sentence

M&A Stories December 10, 2020 Introduction Sometimes a business owner gets an offer for his or her business that is higher than expected. The catch is that a significant part of the price is payable after the closing.  But the

Posted in risk of post closing payments Tagged with: ,

Buyer Can’t Sue Seller for Not Telling Buyer About Pending Loss of Major Customer

M&A Stories December 10, 2020 Introduction It is very important for a prospective buyer of a business to do smart due diligence to validate the purchase price. However, there is always a risk that the seller won’t tell you the

Posted in contracts, due diligence, extra-contractual fraud, fraud in business sale, non-reliance clause Tagged with: ,

Business Buyer’s Owner Loses Trademark to Competitor and Ends Up in Bankruptcy

M&A Stories December 08, 2020 Introduction You have to kick the tires of a business you want to buy. That includes asking whether the target’s tradename infringes upon a competitor’s tradename. The deal This deal involved the sale of the

Posted in copyrights, due diligence, patents, trademark infringement, trademarks Tagged with: ,

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