Monthly Archives: January 2021

Tax Due Diligence May Save Buyer Time and Money in Stock Acquisition

Buyer of business was told by target owner that all taxes had been paid prior to the signing of the stock purchase agreement. Buyer ends up paying significant pre-closing target tax liabilities after closing and suing target owner for fraud.

Posted in due diligence, tax Tagged with: ,

Hospital Buyer and Seller Fight Over Medicare-Medicaid $2.4 Million Payment

Court interpreted APA as giving the hospital buyer the right to a $2.4 million interim lump sum adjustment determined by audit of seller services. M&A Stories Try to make you’re M&A documents user friendly: “Please, speak as you might to

Posted in post-closing adjustments for pre-closing sales and services, receivables Tagged with: ,

SEC Sues Target Officers for Fraud, Seeking Millions of Dollars in Damages

SEC accuses Target’s CEO and CTO of lying to the buyer about owning a game changing product and overstating the target backlog and pipeline. M&A Stories Taking the high road in M&A negotiations is good business: “It’s a rough road

Posted in fraud in business sale Tagged with: ,

Judgment Against Buyer CEO for Lying to Target Is Nondischargeable in Bankruptcy

Target principals’ judgement against Buyer CEO for fraudulently promising them buyer stock and royalties generated from post-merger sale of target products not dischargeable in Buyer CEO’s personal bankruptcy. M&A Stories Taking the high road in M&A negotiations is good business:

Posted in judgement for intentional misrepresentation, nondischargeable debt in bankruptcy Tagged with: ,

Shareholder Can’t Challenge Board Merger Approval Because No Change of Control

A shareholder could not sue his directors for accepting a merger proposal for a claimed lower price than offered by another suitor because each target shareholder was to exchange each target share of stock for 1/3rd cash and the other

Posted in Change of Control, Revlon doctrine Tagged with: ,

Target Shareholders Can’t Compel Target Law Firm to Disclose Merger File

Court says that the target law firm represented the target not the target shareholders in the merger, and the buyer acquired the target law firm files in the merger. M&A Stories January 8, 2021 Introduction The shareholders of an acquired

Posted in Ownership of Target Law Firm File Tagged with: ,

Buyer Waived Privileged Communications Shared with Target During Due Diligence

Court holds that buyer waived its lawyers’ privileged communication when shared during due diligence with the target. The buyer was trying to determine whether the proposed merger would trigger the target’s distribution agreement change of ownership provision and whether the

Posted in attorney client privilege, common interest doctrine Tagged with: ,

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