M&A Stories August 31, 2018 A buyer of a 99-bed skilled nursing facility in Santa Clarita, California learned a hard lesson about due diligence after getting sued by a multi-employer pension plan following its acquisition of the facility. The buyer…
Monthly Archives: August 2018
Buyer Prevails in Securing Vital Real Estate Leases from Bankrupt Nursery Business
M&A Stories August 30, 2018 A Houston-based nursery seized an opportunity when a large California greenhouse operation filed for Chapter 11 bankruptcy. The seller — a Temecula, California grower — obtained court approval to sell the assets of its Hines…
Posted in bankruptcy sale, distressed business acquisitions, leases Tagged with: anti-assignment lease clauses, appellate courts, Bankruptcy court, bankruptcy judges, bankruptcy law, Business acquisition, California nursery, Color Spot Holdings Inc., court reference, court-approved transfer, credit line, district court decision, financial strength, Houston buyer, In Re Color Spot Holdings Inc., legal hurdles, M&A success, positive cash flow, real estate leases, strategic acquisition
Texas Court Narrows Reach of Noncompete Agreement in Grocery Store M&A
M&A Stories August 29, 2018 A Texas appellate court has limited the geographic scope of a noncompetition covenant arising from the 2007 sale of five Mi Rancho Hispanic grocery stores. The buyer, who operates the La Michoacana and El Ahorro…
Posted in covenant not to compete, reformation Tagged with: appellate court, breach of agreement, business goodwill, Court of Appeals of Texas First District Houston, damages, El Ahorro, geographical area, Hispanic grocery stores, Houston, Irving, La Michoacana, limitations, M&A Case, Mi Rancho, noncompete agreement, Oklahoma, Oklahoma City, Ortega v. Abel, Pasadena, Punitive damages, reasonable noncompete, scope of activity, Texas, Texas court, time
M&A Buyer Can Sue Seller for Fraud for Lying About Largest Customer
M&A Stories August 23, 2018 In 2010, a Texas-based insurance-claims-adjusting firm went looking for an acquisition. Through an investment banker, it identified a California-based competitor as a target. The seller was owned and operated by a man named James. The…
Posted in fraud in business sale Tagged with: acquisition case study, Appellate court ruling, business relationships, Buyer-seller negotiations, customer performance reports, due diligence, financial statements, fraud lawsuit, honesty in business transactions, insurance-claims-adjusting sector, legal misrepresentation, litigation in M&A, M&A legal blog, Purchase Price, QBE insurance company, Seller's obligations
Asset Buyer of Business in Bankruptcy Can Risk Successor Liability to Known Seller Creditors
M&A Stories August 20, 2018 In 2009, Chrysler sold most of its assets through a Chapter 11 bankruptcy sale to a new entity formed by the United Auto Workers pension fund, Fiat S.p.A., and the U.S. and Canadian governments. The…
Posted in actual notice to known creditors, bankruptcy sale, distressed business acquisitions Tagged with: airbag incident, asset transfer, Bankruptcy court, bankruptcy sale, buyer responsibilities, Buyer's responsibility, case reference, Chapter 11 bankruptcy, Chrysler, claims, dismiss case, distressed auto business, due diligence, Fiat S.p.A. U.S. and Canadian governments, insights, known creditors, legal dilemma, lessons, liens, M&A challenges, Material Safety Data Sheet (MSDS), notice period, Old Carco LLC, Pre-Closing Liabilities, United Auto Workers pension fund
Alabama’s Mere Continuation Successor Liability Doctrine is Risky for M&A Asset Buyers
M&A Stories August 18, 2018 In 2003, an Alabama credit union hired a Georgia-based construction company to build a facility in Gadsden, Alabama. A completion certificate was issued in March 2006, but ongoing roof leaks soon revealed serious construction defects.…
Posted in successor liability Tagged with: Alabama law, Alabama Teachers Credit Union, asset purchase agreement, asset purchases, business continuity, buyer assurances, Buyer equity, buyer responsibility, Case Study, cautionary tale, construction business acquisition, construction defects, Court Case, Design Build Concepts, key personnel retention, Legal action, legal implications, legalities, M&A, M&A Transactions, merger, post-acquisition issues, seller's name usage, statute of limitations, successor liability
Ambiguous Warranty Allocation in an Asset Purchase Agreement Leads to Litigation
M&A Stories August 15, 2018 A Pennsylvania-based international aerospace components supplier and a Tulsa-based aircraft airframe manufacturer ended up in court over warranty claims tied to two Gulfstream Aerospace Corporation wing supply programs. The dispute arose from an asset purchase…
Posted in asset seller's liabilities, assumed liabilities, excluded liabilities, seller's warranty claims Tagged with: Accountability in M&A, Acquisition challenges, Aerospace Industry, Aerospace M&A, asset purchase agreement, Buyer-Seller Responsibilities, Court decisions in M&A, Delaware Superior Court, excluded liabilities, Industry-Specific Legalities, Legal dispute, liability allocation, M&A Legal Battles, Post-closing disputes, Spirit Aerosystems, Triumph Aerostructures, Warranty claims
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