M&A Stories May 29. 2018 In a recent case, a court wrestled with whether a M&A buyer could recover expectation damages (full expected value of the proposed deal) for the seller’s breach of the LOI’s exclusivity provision. The parties involved…
Monthly Archives: May 2018
New Mexico’s Product Line Exception: Buyer Not Liable Because Buyer Never Made Seller’s Product
M&A Stories May 28, 2018 The basic rule: When you buy a company’s assets, you generally don’t inherit its pre-closing product liability. What you agree to assume in the purchase agreement is what you’re on the hook for — nothing…
Posted in successor liability Tagged with: asset buyer's liability, asset purchase agreement, California law, legal defense strategies, legal doctrines, legal implications, legal nuances, Legal Precedents, Legal Risks, Legal Strategies, liability avoidance, Liability in acquisitions, liability in asset acquisition, M&A case study, M&A legal, manufacturing methods, Mergers and Acquisitions, New Mexico law, Product claims, product design, product liability, product line exception
M&A Buyer Unable to Challenge Net Working Capital Purchase Price Adjustment After Final NWC Reconciliation
M&A Stories May 27, 2018 What Happened A buyer acquired assets from a bankrupt seller. The asset purchase agreement included a net working capital (NWC) purchase price adjustment — standard stuff. The deal called for an estimated NWC at closing,…
Posted in mutual mistake, net working capital adjustment, reformation of contract Tagged with: asset purchase agreement, bankruptcy, business law, Business Transactions, buyer, Case Study, Commercial Law, contract law, contract reformation, corporate finance, dealmaking, diligence, legal implications, Litigation, M&A legal, M&A professionals, Mergers and Acquisitions, mutual mistake, net working capital, purchase price adjustment, risk management, seller, transparency, Valuation
Buyer Beware: Federal Employment Discrimination Successor Liability in Asset Purchases
M&A Stories May 27, 2018 When buying business assets, a buyer can inherit the seller’s federal employment discrimination liability — even if it is an excluded liability in the asset purchase agreement. What Happened A large strategic buyer acquired a…
Posted in federal employment discrimination liability, successor liability Tagged with: Asset Purchase Liability, Buyer Beware, Due diligence in M&A, Federal Employment Discrimination, Legal Risks in Business Acquisitions, Liability in Asset Transactions, M&A legal issues, Mergers and Acquisitions, Risk Management Strategies, successor liability
Asset Buyer Not Liable for Race Discrimination Claim in Employee Hiring Dispute
M&A Stories May 25, 2018 The Case In Mance v. Owings Mills Autos, LLC (D. Md., April 19, 2018), a car dealership buyer acquired the seller’s assets and chose not to hire Tim, a manager at the seller’s dealership. Tim…
Posted in hiring seller's employees, third party beneficiary clause Tagged with: Asset acquisition, Asset buyer obligations, Asset purchase agreement (APA), Business acquisitions, buyer liabilities, Corporate governance, Corporate Law, Corporate transactions, Employee rights, Employment disputes, Employment transition, Legal Liabilities, legal nuances, legal principles, M&A legal, Mance v. Owings Mills Autos LLC, Merger legalities, Race discrimination, Seller expectations, Third-party beneficiary clause
Court Ruling: Buyer Fraud Gives Sellers the Right to Reclaim Business Assets
M&A Stories May 24, 2018 The Facts Roger and Shirley founded a business, then retired and handed day-to-day management to their son Jeffrey. Jeffrey decided he wanted to buy the business himself, so he formed a new entity (“Buyer”) and…
Posted in fraud in business sale, rescission Tagged with: asset purchase agreement, Business acquisitions, business assets, business ethics, business law, business liabilities, business litigation, business ownership, buyer, Corporate governance, Court decision, court judgment, Court ruling, family drama, Fiduciary Duty, fiduciary obligation, financial matters, fraudulent actions, legal accountability, Legal Case, legal implications, Legal Saga, legal transparency, M&A Disputes, M&A legal, M&A Transactions, seller, transparency, undisclosed liabilities
M&A Buyer’s Insurance Shortcut Leads to Punitive Damages
M&A Stories May 23, 2018 In March 2013, Danny’s company (“Buyer”) acquired an RV business from Doug’s company (“Seller”). The lease agreement required Buyer to carry replacement-value insurance on any improvements to the property. Buyer instead purchased cheaper actual-cash-value coverage.…
Posted in insurance requirements, punitive damages Tagged with: Acquisition Documents, actual-cash-value insurance, business law, Business Transactions, Buyer Obligations, Case Study, Contractual Compliance, Contractual obligations, Court Case, industry compliance, Insurance Coverage, Insurance Provision, Legal Disputes, Legal lessons, Legal Liability, M&A legal issues, Mergers and Acquisitions, Punitive damages, replacement-value insurance, Risk mitigation, Seller Rights
Buying a Distressed Business in Chapter 11: What Can Go Wrong as a Stalking Horse
M&A Stories May 22, 2018 Acquiring assets from a Chapter 11 bankruptcy estate has real advantages — most notably, buying assets free and clear of liens and liabilities. But the process carries serious risks, and a 2018 Arizona bankruptcy case…
Posted in distressed business acquisitions Tagged with: Asset acquisition, Auction Process, Bankruptcy Code, bankruptcy court proceedings, bankruptcy court sales, bid procedures, Buyer's Perspective, Case Study, Chapter 11 bankruptcy, court approval, distressed businesses, due diligence, financial risks, Florence Hospital At Anthem LLC, investor caution, Legal Challenges, Legal Risks, Liabilities, M&A legal, Mergers and Acquisitions, Seller's Perspective, stalking horse
Securing Buyer’s Payments in M&A Transactions
M&A Stories May 18, 2018 A recent Ohio case offers a straightforward lesson for sellers in M&A deals: if a buyer owes you money after closing, make sure that debt is secured by the assets they just bought. What Happened…
Posted in securing buyer's note Tagged with: asset purchase agreement, attorney fees, business law, buyer's payments, Case Study, conversion claim, Courtroom Drama, financial obligations, Financing statement, legal pitfalls, legal protocols, legal quagmire, liquor permit, M&A Transactions, Ohio court case, post-closing obligations, proactive measures, promissory note, Punitive damages, Risk mitigation, security agreement, seller's predicament, seller's recourse, third-party purchaser, Uniform Commercial Code
Federal Court Holds M&A Asset Buyer Subject to an Unassumed Vendor Contract by Its Post-Closing Conduct
M&A Stories May 17, 2018 A buyer of the assets of a business carefully picks the vendor contracts it wishes to assume. They usually are described in the APA as assumed liabilities. But what if the buyer continues to deal…
Posted in post asset purchase issues Tagged with: Alabama federal district court, Arbitration provision, asset purchase agreement, buyer actions, Buyer litigation, Buyer Obligations, buyer responsibilities, buyer vigilance, contractual bond, contractual entanglement, contractual obligation, Contractual obligations, federal district court case, inherited contracts, legal implications, legal ramifications, legal recourse, M&A case study, M&A legal topics, Mergers and Acquisitions, mutual assent, PCS Health Systems, pharmaceutical benefits management services, post-acquisition landscape
Recent Comments