M&A Stories June 29, 2018 The Deal In the summer of 2014, a major food tray manufacturer decided to sell its North American foam tray and pads business while keeping its rigid tray segment. The buyer and seller signed an…
Monthly Archives: June 2018
How a Fraud Carve-Out Provision Saved a Buyer’s Lawsuit
Posted in exclusive remedy, fraud carveout Tagged with: Acquistion Documents, asset purchase agreement, Boilerplate Provisions, Breach of contract, Buyer's Acquisition, Case Study, Contractual obligations, Courtroom Drama, Dynamic Realm, Exclusive remedy provision, fraud carve out, fraud claims, Industry Insights, legal analysis, Legal battles, Legal Blog, Legal Maze, legal nuances, M&A legal, Mergers and Acquisitions, Novipax Holdings LLC v. Sealed Air Corporation, Purchase Price, Safeguarding Buyer Interests, Strategic Importance, Time Constraints, Trending Topics
Seller Loses $8.6 Million Escrow by Missing Objection Deadline
M&A Stories June 28, 2018 A Delaware Court of Chancery case from 2017 offers a straightforward lesson for M&A participants: if you miss the deadline to object to an indemnification claim, you lose the right to contest it. What Happened…
Posted in indemnification, timely objection to indemnification claim Tagged with: attention to detail, Breach of contract, business assets, business ecosystem, business enthusiasts, business litigation, business protection, Business Transactions, case analysis, cautionary tale, Court of Chancery, Court rulings, Delaware, diligence, Entrepreneurial insights, escrow, Indemnification claims, Legal Challenges, Legal Disputes, Legal intricacies, Legal lessons, litigation outcomes, M&A legal, M&A practitioners, Mergers and Acquisitions, The HC Companies Inc. v. Myers Industries Inc., timely objections
Employee Rights in M&A: When Hiring Promises Don’t Create Legal Rights
M&A Stories June 28, 2018 The Facts When the largest private hospital operator in the U.S. acquired a financially distressed community hospital, the asset purchase agreement included a commitment to hire all of the seller’s employees. The buyer didn’t follow…
Posted in third party beneficiary clause Tagged with: asset purchase agreement, Contractual commitments, Court rulings, Employee rights, Employment law, Gupta v. Quincy Medical Center Appeals Court Massachusetts, Hiring promises, Industry specifics, Legal Challenges, legal implications, legal insights, legal nuances, legal obligations, legal recourse, M&A agreements, M&A legalities, M&A practitioners, Private hospital acquisition, Terminated executives, Third-party beneficiary rights
A Buyer’s Failure to Disclose a Government Investigation Cost Them $15.5 Million
M&A Stories June 26, 2018 A strategic planning and acquisition management firm purchased a government contractor for $42.7 million in cash, plus up to $19.5 million in earn-out payments tied to post-closing performance targets. The deal collapsed due to a…
Posted in no pending government investigations or inquiries, representations and warranties Tagged with: Acquisition Management, Air Force Contract, asset purchase agreement, Bid Information, Business Consequences, case reference, court verdict, due diligence, Earn-out payments, Financial intricacies, Financial Targets, Government Contractor, Hidden liabilities, Legal action, Legal Jargon, M&A landscape, M&A legal, Mergers and Acquisitions, Pending Government Investigation, Supreme Court of Virginia, Suspension, Transparent communication
Dispute Over Certificate of Deposit Ownership After M&A Closing
M&A Stories June 19, 2018 A post-closing dispute between a buyer and seller over a $150,000 certificate of deposit illustrates what happens when asset purchase agreements are drafted carelessly. The deal was structured as an asset purchase. The agreement stated…
Posted in cash and cash equivalents, Description of business assets purchased Tagged with: ambiguity in contracts, asset deal, asset purchase agreement, Bankruptcy court, business law, buyer-seller clash, cash and cash equivalents, certificate of deposit, contract disputes, contract drafting, contract interpretation, court intervention, E.D. Tennessee, excluded assets, In Re HC Liquidation Inc., Legal action, Legal intricacies, M&A, Mergers and Acquisitions, Post-closing disputes, purchased assets
Inventory Accuracy in M&A Deals: Don’t Skip the Count
M&A Stories June 14, 2018 A buyer entered negotiations expecting to acquire $4.7 million worth of inventory. After closing, they had less than half that amount — and no legal recourse. Here’s what happened: the seller provided a 57-page inventory…
Posted in Description of business assets purchased Tagged with: American Welding & Gas, Arc Welding Supply Co., asset purchase agreement, Asset Valuation, Business acquisitions, business growth, business risks, Case Study, Clarity in contracts, Contractual agreements, deal-making, Inventory accuracy, inventory assessment, inventory verification, investment protection, legal diligence, Legal Disputes, Legal lessons, M&A deals, Mergers and Acquisitions, post-closing audits
Court Holds That Owner of a Buyer Can Be Sued by the Seller for Buyer’s Breach of an Asset Purchase Agreement
M&A Stories June 27, 2018 In Mohegan Lake Motors, Inc. v. Maoli, a seller sued not just the buyer entity but the buyer’s individual owner after the buyer walked away from a signed asset purchase agreement. What Happened In June…