Navigating the post-closing working capital adjustment in an M&A deal can be fraught with legal risks. This blog post uses a recent Delaware court case to highlight a common mistake and reveals how sellers and their advisors can protect a…
Blog Archives
M&A Lesson: Why Your Working Capital Deadlines Need Enforceable Consequences
Posted in dispute resolution procedure, net working capital adjustment, purchase price adjustment, working capital adjustment Tagged with: asset purchase agreement, business law, contractual provisions, deal terms, Delaware law, due diligence, legal risk management, lower middle market, M&A advisors, M&A contract, M&A for sellers, M&A legal, M&A litigation, M&A mistakes, private target M&A, purchase price adjustment, working capital adjustment
Protecting Earnouts The Critical ‘Consistent with Past Practice’ Provision
Navigating M&A earnouts can be a high-stakes game. This blog post explores a recent Delaware court case to reveal a common but costly mistake made by sellers. Learn how a single, overlooked provision—the “consistent with past practice” clause—could have prevented…
Posted in Calculating Earnout Metrics, Consistent with past practice of acquired business, problems with earnouts Tagged with: accounting policies, Acquisition Strategy, Business Valuation, Cheffers v. Ideagen, consistent with past practice, contingent consideration, contractual provisions, Delaware court case, earnout clauses, Earnout disputes, legal advisors, legal risk management, lower middle market, M&A earnouts, M&A lawyers, M&A litigation, merger agreement, private company acquisition, Private Equity, seller due diligence, strategic buyers
The Price of an Informal Disclosure: The Hidden M&A Seller Mistake
Discover why informal disclosures can’t protect you in M&A. This blog post examines a Delaware case where a seller’s oral disclosure led to a multi-million dollar lawsuit, highlighting the critical need for contractual carve-outs in lower middle market deals. Learn…
Posted in Problems with financials Tagged with: APA, asset purchase agreement, Business acquisition, buyer due diligence, contractual provisions, Delaware law, disclosure schedules, indemnification, legal risk management, lower middle market M&A, M&A advisors, M&A Due Diligence, M&A law, M&A litigation, M&A mistakes, M&A negotiation, pre-closing, private company M&A, representations and warranties, seller mistakes
The Buyer’s Blind Spot How a New York Asset Deal Can Become a Legal Trap
Navigate the hidden legal risks of M&A in New York. This post dives into the “mere continuation” doctrine, a legal trap that can expose all-cash asset buyers to a seller’s unassumed liabilities. Learn how to identify and manage the risks…
Posted in mere continuation Tagged with: asset purchase, Avamer, business law, contractual provisions, de facto merger, deal structure, escrow, holdback, Hunter Boot, indemnification, legal risk, legal risk management, lower middle market, M&A, Mere Continuation, Mergers and Acquisitions, New York law, Private Equity, strategic buyers, successor liability
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
Protecting Your Earnout in a Post-Closing Seller Bankruptcy
Unlock critical insights for lower middle market M&A. This post reveals a non-obvious risk for sellers relying on earnouts: what happens when the selling entity faces post-closing bankruptcy? Learn crucial pre-closing contractual strategies to protect your earnout and navigate complex…
Posted in earnouts in bankruptcy, problems with earnouts Tagged with: APA, asset purchase agreement, bankruptcy law, Business Sale, Buyer's Perspective, Chapter 11, contingent payment, contract drafting, contract rejection, contractual provisions, Corporate Law, deal-making, distressed M&A, due diligence, Earnout Provisions, earnouts, legal advice, Legal Disputes, legal risk management, lower middle market M&A, M&A, M&A advisors, M&A litigation, Mergers and Acquisitions, negotiation strategies, Post-closing adjustments, post-closing obligations, pre-petition debt, private company M&A, Purchase Price, sale of business, seller bankruptcy, Seller's Perspective, transaction structuring, vested rights
Mastering the Hybrid Noncompete A Perilous Path in M&A
Unlock the hidden risks of hybrid noncompetes in M&A deals where sellers stay on. This essential guide for buyers, sellers, and advisors reveals why combined restrictive covenants often fail in court and how strategic pre-closing legal structuring can protect your…
Posted in covenant not to compete, hybrid noncompetes Tagged with: 8th Circuit Court of Appeals, Arkansas law, business goodwill protection, contract drafting, contractual provisions, deal structuring, employment noncompete, enforceability of noncompetes, legal risk management, legal strategy, lower middle market M&A, M&A legal, M&A litigation, noncompete agreement, Post-closing integration, pre-closing due diligence, private equity acquisition, private target businesses, Restrictive covenants, sale of business noncompete, seller-owner employment, Strategic buyer
In Asset Sales How to Preserve Your Right to Recover Damages from a Co-Owner’s Pre-Closing Misconduct
For lower middle market M&A asset sales, learn a critical strategy to preserve seller owners’ rights to recover damages from pre-closing misconduct like fiduciary breaches or diverted opportunities. A recent Delaware case highlights how overlooked contract language can jeopardize these…
Posted in Excluded Assets Tagged with: APA, asset purchase agreement, Baugh v Ingle case, business sale legal issues, co-owner disputes, contractual provisions, corporate opportunity usurpation, Delaware Court of Chancery, derivative claims, excluded assets, family business M&A, fiduciary duty breach, founder exits, fraud claims, legal pitfalls, legal risk management, lower middle market M&A, M&A advisors, M&A asset sales, M&A Due Diligence, M&A legal strategy, post-closing litigation, pre-closing misconduct, private company M&A, private equity acquisition, retained claims, seller owners, Strategic buyer
M&A Earnouts on Acquired Contracts: Guarding Against Hidden Termination Risks
Protect M&A earnouts linked to acquired contracts. Understand how termination rights create hidden risks for seller payments and find pre-closing strategies for lower middle market deals. M&A Stories May 29, 2025 In lower middle market mergers and acquisitions, earnouts are…
Posted in earnout based upon revenue from at will contracts, problems with earnouts Tagged with: acquired contracts, asset purchase agreement, at-will contracts, Buyer Obligations, contract termination, contractual provisions, cybersecurity staffing, earnout protection, implied covenant of good faith, lower middle market M&A, M&A earnout, M&A litigation, pre-closing due diligence, private company sale, seller protections, transaction risk
Recent Comments