M&A Stories October 29, 2018 A 2018 New Hampshire Supreme Court decision clarifies an important point for M&A practitioners: a buyer that acquires all of a seller’s contracts as part of an asset purchase can enforce those contracts — including…
Monthly Archives: October 2018
Read Before You Release: How Purchase Price Adjustment Settlements Can Waive Indemnity Rights
M&A Stories October 25, 2018 Date: October 25, 2018 A buyer discovered the hard way that a broadly worded release can eliminate claims it never intended to give up. The deal involved the sale of an insurance agency. After closing,…
Posted in book value adjustment, purchase price Tagged with: Appellate Division - Supreme Court of New York, buyer's claim dismissal, Cypress Group Holdings v. Onex Corp., Insurance Company Acquisition, Legal action, M&A Dispute Resolution, negotiation, New York court, private insurance company, purchase price adjustment, release agreement, Representation and Warranty, software application defects, software breach case, stock purchase agreement
Asset Buyer Was Not Responsible for Seller’s Wage and Hour Issues Because Buyer Had No Actual Knowledge
M&A Stories October 23, 2018 A New York federal court recently ruled on whether an asset buyer could be held liable for a seller’s unassumed wage and hour obligations arising from a 2016 sale of a Manhattan dry cleaning business.…
Posted in due diligence, federal wage and hour violations, successor liability Tagged with: Asset Buyer Liability, Diaz v. Slayton One Cleaner Inc., Due Diligence in Acquisitions, Federal court ruling, M&A legal blog, New York M&A Cases, Seller's liabilities, Small Transaction Red Flags, Successor liability doctrine, Wage and Hour Issues
Buyer Failure to Notify M&A Seller of Its Indemnification Claim Cost It $6 Million
M&A Stories October 17, 2018 A $6 million escrow loss came down to one procedural misstep: the buyer never sent written notice to the seller. The deal involved a 2013 negotiation between a buyer and seller of consumer debt accounts…
Posted in escrow, fraud in business sale, notice provision, reliance Tagged with: Buyer's misstep, Court decision on escrow, Escrow agreement procedures, Legal dispute resolution, M&A Case, M&A transaction lessons, Notice procedures in M&A, PR Acquisitions LLC v. Midland Funding LLC, Purchase agreement indemnification, Release of escrow funds
M&A Buyer Should Have Had the Offset or Setoff Right to Withhold $2.8 Million of Tax Refunds Owed Seller Under the SPA for Fraud and Breach of Contract
M&A Stories October 11, 2018 On March 31, 2014, a private equity firm acquired the stock of a New Orleans-based environmental remediation company from another private equity firm for approximately $100 million. The stock purchase agreement included standard representations and…
Posted in offset or setoff provision Tagged with: Buyer's indemnification, Case reference: Cricket Stockholder Rep LLC v. Project Cricket Acquisition Inc., Court rulings in M&A, Environmental remediation company, Indemnification claims, Legal actions in M&A, M&A legal blog, New York State Court, Offset provisions, Post-closing challenges, Post-closing transition, Pre-closing tax refunds, Private equity firm, Risk mitigation in M&A, Setoff provisions, stock purchase agreement
SPA Seller Execution of Release Bars It from Seeking Reimbursement from Buyer and Target for Pre-Closing Target Uncovered Insurance Claims
M&A Stories October 5, 2018 A Delaware Court of Chancery case arising from the stock acquisition of a New Jersey environmental services and waste management company offers a useful reminder: a well-drafted release in a stock purchase agreement can shut…
Posted in shareholder release, stock purchase agreement Tagged with: buyer's protection, Contractual obligations in M&A, Delaware Court of Chancery, Insurance in M&A transactions, Legal insights in M&A, Liability releases, M&A Dispute Resolution, Post-closing disputes, Pre-Closing Liabilities, stock purchase agreement
Two-Year M&A Survival Period Applied Only to Indemnification for Seller Breach of Representations and Warranties — Not to Seller’s Covenant to Indemnify for Pre-Closing Product Liability Claims
M&A Stories October 30, 2018 A South Bend, Indiana restraint system manufacturer acquired an Oklahoma City seat belt producer. A dispute followed over who was responsible for product liability claims tied to products made or sold before the deal closed.…