Explore the legal implications of a case where a buyer’s purchase price may triple post-closing due to an undisclosed underfunded union pension plan liability. Learn from the Members of the Board Of Administration of the Toledo Area Industries UAW Retirement…
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Buyer’s purchase price may triple post-closing because of underfunded union pension plan
Posted in asset purchase agreement, constructive knowledge, distressed business acquisitions, federal multiemployer pension plan withdrawal liability, multi-employer pension plan, successor liability, union liabilities Tagged with: asset purchase agreement, Business continuity analysis, Buyer's purchase price, Due diligence in M&A, ERISA (Employee Retirement Income Security Act), Goodwill in M&A, Hidden liabilities, Legal consequences in M&A, Legal implications in M&A, M&A case study, M&A legal blog, M&A lessons learned, Obz Inc case, Toledo Area Industries UAW Retirement Income Plan, Union pension plan liability
Court Rules in Favor of Buyer in Union Pension Liability Dispute
Explore a recent M&A case where a buyer successfully defends against a union pension plan’s claim for the seller’s unfunded pension liability. Dive into the details of the case, the buyer’s defense strategy, and the court’s decision. M&A Stories November…
Posted in asset seller's liabilities, constructive knowledge, due diligence, federal multiemployer pension plan withdrawal liability, multi-employer pension plan, post asset purchase issues, successor liability, union liabilities Tagged with: asset purchase agreement, Buyer's knowledge, Collective Bargaining Agreement, Congressional interest, due diligence, ERISA, Legal defense strategy, M&A Case, Multi-employer pension plan, Northwest Administrators Inc. v. Santa Clarita Convalescent Corporation, Pension documents, Preventing underfunding, Seller's records, Union pension liability
Asset Buyer with Constructive Knowledge Faces Successor Liability for Seller’s Multi-Employer Pension Obligations in California M&A
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…
Posted in constructive knowledge, multi-employer pension plan, union liabilities Tagged with: asset purchase agreement, Business acquisitions, Buyer's duty, California M&A, Collective Bargaining Agreements, constructive knowledge, due diligence, ERISA Indemnification, legal battle, Legal Developments, M&A legal blog, M&A Risks, Multi-Employer Pension Liabilities, Northwest Administrators Inc. v. Santa Clarita Convalescent Corporation, Pension Plan Obligation, Santa Clarita, Skilled Nursing Facility, Union Affiliations, Union-Related Issues
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- LMM Sellers: Make the Buyer Commit in Writing to Fund Working Capital — or Lose Your Earnout
- Managing Earnout Risks Based Upon Sales When Selling to a Competitor
- They’re Already Shopping in Your Market — Are You Ready for the Call?
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- buying distribution business
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- CERCLA or superfund liability
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- closing
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- commercially reasonable efforts
- common interest doctrine
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- conditions to closing for buyer's benefit
- consent to assignment
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- Consistent with past practice of acquired business
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- contracts
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- Covenants
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- customer list
- customer list
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- damages
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- deduction of expenses buyer traded away
- deferred closing
- defining earnout milestone by business goal
- defining retained business by category not as currently conducted
- Delaware
- deliberate fraud carveout
- denial of consent must be reasonable
- dental practice sale
- Description of business assets purchased
- determination of purchase price adjustment
- diminuation of value
- direct
- director and officer duty of care
- director liability
- directors and officers insurance policy
- discharge in bankruptcy
- disclosure schedule
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- dispute resolution procedure
- dispute resolution provision
- distressed business acquisitions
- divestitures
- doing deal with company's officer or director
- due diligence
- Duty to Defend
- duty to defend
- Duty to negotiate in good faith
- duty to warn
- earn out
- earn out dispute procedure
- earn outs
- Earned customer deposits
- earnout
- earnout as ownership interest in buyer
- earnout based upon revenue from at will contracts
- earnout dispute resolution procedure
- earnout payable upon constructive termination
- earnout payable upon termination without cause
- earnouts based on construction milestones
- earnouts based upon fda/ec milestones
- earnouts in bankruptcy
- EBITDA
- EBITDA
- EBITDA earnouts
- economic loss doctrine
- employment agreement
- employment agreement
- enforce against nonparty
- enforceability of non-owner noncompete
- enforcing buyer earnout deadlines
- entire fairness
- environment representations and warranties
- environmental
- environmental problems
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- equitable contribution
- equitable estoppel
- escrow
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- Excluded Assets
- excluded liabilities
- excluded or retained liabilites
- exclusive remedy
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- executory contracts
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- Express efforts clause vs. Delaware's implied covenant of good faith and fair dealing
- extension by contract in Delaware
- extension of closing
- extra-contractual fraud
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- failure to make timely purchase price payment
- fair insider deal
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- fee based upon buyer debt assumption
- financial representation and warranty
- financing acquisition issues
- financing contingency
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- form over substance
- forum non conveniens doctrine
- forum selection clause
- franchise sale
- fraud
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- fraud in business sale
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- getting buyer to provide earnout calculation supporting data
- governmental approval
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- Guaranty
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- handshake redemption obligation
- hinder, delay or defraud
- hiring seller's employees
- hybrid noncompetes
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- implied covenant of good faith and fair dealing
- implied duty of good faith and fair dealing
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- indemnification
- indemnification cap
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- independent trustee
- inequitable
- insider
- insurance broker duty
- insurance coverage
- insurance requirements
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- integration clause bars extracontractual promises of future performance
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- leases
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- material
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- missing attachment to acquisition document
- modification as counteroffer
- multi-employer pension plan
- mutual mistake
- mutual mistake
- negligent misrepresentation
- Negotiated Pre-closing price concessions and releases
- net working capital adjustment
- New York
- no kickback or bribe rep
- no oral modifications of contract
- no pending government investigations or inquiries
- no solicitation of seller employees
- No Undisclosed Liabilities
- Non-Disparagement Clause
- non-reliance clause
- nonbinding
- nonbusiness income
- nonbusiness income/sale of subsidiary
- noncompete area
- noncompete term extensions
- noncompetition covenant
- noncompetition covenant term
- nondischargeable debt in bankruptcy
- nondisclosure agreement
- nondisclosure agreements
- nondisclosure provision
- nonqualified preferred stock
- nonsolicitation of employees and customers
- nonsolicitation of former customers
- note payment amount adjustment
- notice
- notice provision
- objection -reasonable detail
- officer duty of care
- offset or setoff provision
- offset right
- One class of stock
- only assessed taxes
- oral contract
- oral contracts
- oral copyright agreement
- ordinary course of business
- overly complicated language in contract
- owner liability for company breach of financing deal
- Ownership of Target Law Firm File
- parol evidence rule
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- patents
- payroll tax
- percentage of purchase price
- permits and certificates
- personal goodwill
- personal guaranty
- personal guaranty of company debt by selling shareholder
- personal guaranty of lease
- Personal Name
- photo or image
- piercing veil of acquisition subsidiary
- post asset purchase issues
- post closing covenants
- post signing asset valuation
- post-closing adjustments for pre-closing sales and services
- post-closing sales tax
- PPA v indemnification
- PPP loan
- PPP loan assumption
- pre-closing management agreement
- pre-closing operating arrangement
- pre-closing sales tax
- Pre-Suit Investigation Right
- preservation of due diligence materials
- prior-material-breach doctrine
- private credit financing
- private equity
- Privilege Access Protocol
- Problem with distributors
- Problem with Investment Banker/Broker/Finder Fee
- problem with mandatory arbitration clause
- Problem with products
- problem with prorations
- problem with purchase price adjustment
- problem with seller co-owners
- problem with seller contract
- Problem with seller lessor or landlord
- Problem with seller owner's competition
- problem with seller's owner
- problem with stock options
- Problem with Union Pensions
- Problem with Vendors and Suppliers
- Problems when business fails after closing
- Problems with Bankruptcy Auction Sales
- Problems with business records
- Problems with Competitors
- problems with condition of assets
- problems with creditors of distressed business
- problems with customers
- Problems with Deferred Purchase Price
- Problems with Deposits
- Problems with Description of Assets
- Problems with description of purchase price
- Problems with distressed business seller unexpired tenant leases
- problems with divestitures
- Problems with due diligence
- problems with earnouts
- problems with employees
- problems with escrows
- Problems with financials
- problems with financing transaction
- problems with forum selection clauses
- Problems with franchise deals
- problems with general liability insurance
- Problems with governments
- problems with indemnification notice
- problems with insurance
- Problems with intellectual property
- problems with leases
- problems with noncompetition covenants
- problems with oral M&A promises
- problems with patents
- problems with pensions
- problems with post-closing litigation in inconvenient form
- Problems with post-closing management of business
- problems with products liability claims
- Problems with Real Estate Leases
- problems with receivables
- problems with regulatory industry acquisitions
- Problems with related party contracts
- Problems with rollover equity
- Problems with sale of auto dealerships
- problems with seller nondisclosure
- problems with seller's employees
- problems with seller's lender
- Problems with seller's pre-closing errors & omissions
- Problems with seller's projections
- problems with seller's real property
- problems with seller's unemployment insurance experience rating
- problems with sharing tax benefits
- problems with simultaneous closings
- problems with subordination rights
- problems with successor liability
- problems with survival provisions
- problems with taxes
- Problems with typos
- Problems with Undisclosed Liabilities
- Problems with undocumented employees
- product line exception
- projections
- projections
- promissory estoppel
- promissory note
- prudence
- public information exclusion
- punitive damages
- purchase agreement
- purchase price
- purchase price adjustment
- purchase price reduction
- Put buy infrastructure promises in writing
- quality of earnings assessment
- ratifying unassumed contract by post-closing action
- reasonably equivalent value
- receipt of buyer equity – seller protections
- receipt of buyer equity or security
- receipt of buyer equity or security
- receivables
- reciprocal Non-Disparagement Clause
- recoupment doctrine
- reformation
- reformation of contract
- regulated business
- reliance
- remote use of trademark out of territory
- representation and warranty about customers
- representations and warranties
- rescission
- rescission
- restricted offset or setoff
- restrictive post-closing covenants
- retained business carveout
- retaliation
- retention bonus
- revenue and profit projections
- reverse termination or breakup fee
- Revlon doctrine
- Right of publicity
- risk of post closing payments
- robust buyer litigation warranty in earnout deal
- robust objective buyer earnout covenants
- royalty
- S corporation
- sale leaseback
- sale of assets of business
- sale of business to ESOP
- sale of product line
- sales order
- sales tax
- sales tax imposed on equity sale of DRE
- sales tax risk
- SBA approval re PPP loan
- scienter
- scope
- Section 1377 election
- Section 363 sale
- securing buyer's note
- securing deferred purchase price
- security agreement
- seller carried purchase price
- seller knowledge
- seller owner responsibility for underreported sales tax
- seller owners equity interest in buyer
- seller ownership in buyer
- seller rep of no federal employer liability
- seller's age discrimination claims
- seller's covenants
- seller's federal injunctions
- seller's unemployment experience rating
- seller's warranty claims
- seller's workers compensation experience rating
- Selling shareholders problem with their board of directors
- severance benefits
- sexual harassment
- shareholder approval of deal
- shareholder buyout of partner
- shareholder personal guaranty of target lease
- shareholder release
- sharing transaction tax deduction benefits
- sick time
- signature escrows are risky
- signing LOI with revisions by signer
- special indemnity escrow
- specific performance
- spousal consent
- state and local tax
- state approval of nonprofit hospital
- state franchise/income tax
- statute of frauds
- statute of limitations
- statute of limitations
- stay bonus
- step-down provision
- stock purchase agreement
- stock sale
- strategic acquisition
- strategic acquisition
- structure of transaction
- subordination
- substance over form
- substantially all assets
- success fee
- successor liability
- sufficiency of assets rep
- supply problems
- survival of covenants
- survival of reps and warranties
- survival period commencement
- tangible net worth
- target's stock options
- tax
- tax benefit sharing
- tax deferred reorganization
- tax penalties and additions
- Taxation
- termination of M&A agreement
- termination or breakup fee
- third party
- third party beneficiary clause
- time of the essence
- timely objection to indemnification claim
- tolling
- tolling
- tort misrepresentation in M&A
- tortious interference with prospective economic advantage
- trade secret misappropriation
- trade secret misappropriation by former seller employee
- trademark infringement
- trademarks
- transferee liability for taxes IRC Section 6901
- TRO/preliminary injunction before filing for arbitration
- tying fraud to economic loss
- typo or scriverner's error
- UCC search
- Uncategorized
- understanding private equity
- undisclosed deal term
- Uniform Fraudulent Transfer Act or Uniform Voidable Transfer Act
- union fringe benefits
- union liabilities
- unitary business
- unjust enrichment
- unliquidated or disputed claim
- unwanted assets
- vacation time
- valuation
- waiver of contractual provision
- waiver of jury trial
- waiver of removal to federal court
- waiver provision
- willful breach carveout
- willing buyer or procuring cause
- Withholding Post-closing payments
- working capital adjustment
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