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Seller’s Stock Purchase Agreement Disclosure Schedule Blocks Buyer’s $1.4 Million Claim

Introduction The buyer of a company wants to minimize the risk that it overpays for a company. One way to minimize this risk is thorough due diligence. Find out everything you can about the target business. In addition, the buyer

Posted in disclosure schedule, No Undisclosed Liabilities, stock purchase agreement Tagged with: , ,

S Corp Stock Seller Can Sue Buyer for Not Closing Tax Books Mid-year

Introduction An S corporation does not pay federal corporate income tax. The S corporation passes its income, deductions and credits through to its shareholders, in proportion to their ownership interest in the S corporation. The shareholders then pay income tax

Posted in allocation of preclosing taxes refunds and credits, boilerplate provisions, further assurance provision, Internal Revenue Code Section 1377 election, purchase agreement, stock purchase agreement Tagged with: , , ,

Boilerplate in business purchase agreement – good for insomnia, but may be important in a post-closing fight

Introduction Reading boilerplate in a business purchase agreement helps me sleep. The language is a tough read. But beneath the dense language are words that can really matter when a fight breaks out after the closing. The deal The buyer

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Worst case – buying a business with a large unknown liability

Introduction One of the biggest risks in buying a business, car or house is the unknown problems that pop up after the purchase. This case illustrates the problem. The deal Buyer purchased all the stock of a company from sellers.

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Hawaii federal court says that seller of convenience stores cannot discharge his deal fraud liability in bankruptcy

Corporate entities controlled by Seller sold a chain of convenience stores and related assets to corporate entities controlled by Buyer. This sale was governed by a stock purchase agreement. The stock purchase agreement required that Seller submit a working capital

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