M&A Stories November 4, 2025 An earnout is often a critical component of the sale price for a lower middle market private company, making a seller’s desire for a prompt payment understandable. Conversely, the buyer typically seeks an efficient and…
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Earnout Deadlines: How Sellers Can Ensure Timely Dispute Resolution
Posted in earnout dispute resolution procedure, problems with earnouts Tagged with: Acquisition Agreement, alternative dispute resolution, condition precedent, Earnout disputes, EBITDA earnout, express condition precedent, independent accountant determination, legal risk mitigation, lower middle market M&A, M&A advisors, M&A legal risk management, M&A litigation, Material breach, materiality of timely delivery, Post-closing disputes, pre-closing contractual drafting, private company acquisition, seller side M&A, time is of the essence
The Fatal Flaw in an Earnout: How a Seller Lost a Claim with the Wrong Dispute Clause
In M&A deals, earnouts can lead to a costly trap. Discover how a seller lost a multi-million dollar claim in a recent federal court case by having the wrong contractual provisions. This post breaks down the critical difference between an…
Posted in earnout dispute resolution procedure, problems with earnouts Tagged with: asset purchase agreement, Breach of contract, Business owners, contractual provisions, Crest Foods v. Fat Brands, dealmaking, dispute resolution, due diligence, earnout, Earnout disputes, Franchise acquisition, franchisor, indemnification, legal advisors, legal risk, Litigation, lower middle market, M&A, Mergers and Acquisitions, Post-Closing, pre-closing, private company, purchase price adjustment, survival clause, Valuation
Recent Posts
- Delaware Chancery Court Uses Implied Covenant to Force Buyer to Supply Information to Seller Necessary to Identify Pipeline Projects That Qualify for an Earnout
- Why Every M&A Earnout Deal Needs a Buyer Efforts Clause — Even with Strong Buyer Covenants
- M&A Seller Deadlines Nobody’s Watching: Earnout Calculations, Indemnification, and Escrow Claims
- Delaware’s Implied Covenant of Good Faith and Fair Dealing Can’t Save $400 Million Regulatory Earnout Milestone When Government Changed Approval Pathway
- What Your Anti-Reliance Clause Cannot Do
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- Delaware
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- dental practice sale
- Description of business assets purchased
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- earn outs
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- problems with oral M&A promises
- problems with patents
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- Problems with Real Estate Leases
- problems with receivables
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- Problems with related party contracts
- Problems with rollover equity
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- 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
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- product line exception
- projections
- projections
- promissory estoppel
- promissory note
- prudence
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- punitive damages
- purchase agreement
- purchase price
- purchase price adjustment
- 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
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- regulated business
- reliance
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- representation and warranty about customers
- representations and warranties
- rescission
- rescission
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- restrictive post-closing covenants
- retained business carveout
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- revenue and profit projections
- reverse termination or breakup fee
- Revlon doctrine
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- risk of post closing payments
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- royalty
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- scienter
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- Section 363 sale
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- sexual harassment
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- shareholder buyout of partner
- shareholder personal guaranty of target lease
- shareholder release
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- sick time
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- social media transfer
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- step-down provision
- stock purchase agreement
- stock sale
- strategic acquisition
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- structure of transaction
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- substantially all assets
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- tangible net worth
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- tax
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- third party
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- 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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