M&A Stories July 30, 2018 A July 2018 Delaware court decision confirms that a buyer’s owner can be held personally liable for fraudulent statements made outside an asset purchase agreement — even when that agreement contains an integration clause. What…
Monthly Archives: July 2018
Navigating M&A Pitfalls: Tax Benefit Sharing and Liquidated Damages
M&A Stories July 26, 2018 In August 2013, a buyer acquired a global internal audit and consulting subsidiary. The stock purchase agreement required the buyer to pay the seller 50% of certain tax benefits generated by the deal. If the…
Posted in liquidated damages provision, tax benefit sharing Tagged with: breach damages, breach severity, Business acquisition, contractual provisions, expert testimonies, jury ruling, legal complexities, Legal Disputes, legal pitfalls, liquidated damages, M&A, M&A Lessons, Mergers and Acquisitions, NewCSI Inc. v. Staffing 360 Solutions Inc., penalty clauses, Purchase agreement, stock purchase agreement, tax benefit sharing
Upholding Noncompetition Covenants: Safeguarding Business Value
M&A Stories July 12, 2018 A 2017 New York court decision offers a practical reminder of why noncompetition covenants matter in business acquisitions — and what happens when a seller ignores one. The buyer was a full-service distributor and supplier…
Posted in covenant not to compete Tagged with: Acquired Business, asset purchase agreement, Breach of contract, business law, Business Purchase Agreement, Business Safeguarding, Business Value Protection, Buyer's Recourse, Court Injunctions, Janitorial Supply Business, Legal Actions, Legal battles, legal insights, Legal Precedents, legal recourse, M&A legal, M&A Narratives, Market Area Restrictions, Mergers and Acquisitions, New Venture Establishment, Noncompete Clauses, Noncompetition covenants, Paper Products Distribution, Repackaging Industry, Sales Impact, Shimon v. Paper Enters. Inc., Trending Legal Topics
Buyer Sues Restaurant Seller for Inflating Sales Figures Before Closing
M&A Stories July 11, 2018 A buyer acquired the assets of Checkers and Auntie Anne’s franchise restaurants located inside a Wal-Mart in Gainesville, Virginia. The seller provided financial statements showing monthly sales of roughly $67,000 over the prior eight months.…
Posted in due diligence, fraud in business sale Tagged with: acquisition pitfalls, Auntie Anne’s franchise, boardroom insights, Business acquisition, business ethics, business ownership, business pitfalls, CFO guidance, Checkers franchise, Court Case, Court decisions, deceptive practices, due diligence, financial discrepancies, financial scrutiny, Legal action, legal battle, Legal lessons, legal scrutiny, M&A, M&A Transactions, Mergers and Acquisitions, real-world lessons, Sharma v. USA International LLC, USA International LLC
M&A Asset Buyer Not Subject to Seller Federal Injunction
M&A Stories July 10, 2018 In ADT LLC v. NorthStar Alarm Services, LLC (No. 16-15351), a federal appeals court ruled that an asset buyer was not bound by a federal injunction against the seller because the buyer had no notice…
Posted in post asset purchase issues, seller's federal injunctions Tagged with: ADT case, ADT LLC v. NorthStar Alarm Services LLC, ADT vs. NorthStar Alarm, asset acquisitions, asset purchase agreement, business contracts, business decisions, business law, business stakeholders, buyer accountability, buyer notice, buyer responsibilities, case analysis, Court decisions, de facto merger doctrine, Federal court ruling, federal trademark laws, injunction implications, Legal Developments, legal obligations, Legal Precedents, liability nuances, M&A legal, security industry, seller federal injunctions
Asset Buyer Responsible for Liability of Unpurchased Seller Division
M&A Stories July 5, 2018 A buyer paid $872,000 for a seller’s assets, deliberately excluding the seller’s medical division. The seller had previously taken out a $583,000 loan from a creditor to develop an ultrasonic medical device washer — a…
Posted in buyer's assumption of seller liabilities in asset acquisition Tagged with: Asset Buyer Liability, Asset purchase agreements, Assumed liabilities, business contracts, Buyer Obligations, Buyer's responsibility, CFOs, Contractual obligations, creditor lawsuit, defaulted loan, entrepreneurs, excluded divisions, financial implications, Intuitive Surgical Operations Inc. v. Midbrook LLC, legal entanglements, legal foresight, Legal intricacies, Legal lessons, legal ramifications, M&A Case, M&A Transactions, Post-closing disputes, precision in drafting, wealth advisers
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