Avoid costly post-closing legal battles! This post breaks down the pivotal Delaware Court of Chancery ruling, Cytotheryx, which confirmed that a broadly worded Delaware choice-of-law clause in a merger agreement applies not just to contract disputes, but also to related…
Blog Archives
When M&A Disputes Go Public: The Lesson of Broad Delaware Choice-of-Law Clauses
Posted in boilerplate provisions, choice of law provision, scope Tagged with: APA, asset purchase agreement, Choice of Law Clause, contract drafting, Contractarian Law, Cytotheryx v. Castle Creek, Deal Counsel, Defamation, Delaware Choice-of-Law, Delaware Court of Chancery, fraud claims, Governing Law Provision, Innocent Construction Rule, litigation risk, lower middle market, M&A, M&A legal, M&A Risk Management, merger agreement, Mergers and Acquisitions, Misrepresentation, Post-Closing Dispute, Predictability in M&A, Private Equity, private target, seller side M&A, SPA, stock purchase agreement, Strategic buyer, tort claims
The Perils of Unfinished Accounting: A Cautionary Tale for M&A Sellers
Navigate the complexities of M&A law with insights into recent cases impacting buyers and sellers in the lower middle market. This post analyzes the PDS Acquisition v. KDHM ruling, revealing a crucial pitfall for sellers regarding the treatment of earned…
Posted in Earned customer deposits, Excluded Assets Tagged with: accounting, APA, asset purchase agreement, Business acquisition, Business Sale, buyer representation, Buying Established Business Assets, contract law, customer deposits, due diligence, earned revenue, excluded assets, John McCauley, Legal Blog, legal risk, lower middle market, M&A, M&A litigation, Mergers and Acquisitions, MK Law, offsetting accounts receivable, Post-Closing Dispute, private company, seller representation, Selling Established Business Assets, Texas law, unearned revenue
BUYER OF WASTE TRANSPORTATION BUSINESS PREVAILS IN POST-CLOSING COMMON CARRIER CERTIFICATE DISPUTE WITH COMPETITOR
The buyer was aware that the seller had granted a license to use seller’s common carrier certificate to a competitor before the closing. But closed anyway because buyer’s lawyer thought it was not enforceable. M&A Stories February 18, 2022 Introduction:…
Posted in permits and certificates Tagged with: Buyer Prevails, Common Carrier Certificate, Competitor Dispute, Dynamic Envtl. Services v. Marioneaux, Licensing Agreement, Louisiana Public Service Commission, Louisiana Waste Transportation, M&A legal blog, Post-Closing Dispute, Waste Transportation Business
Lawsuit Over EBITDA Earnout Dispute
Explore a post-closing dispute in mergers and acquisitions (M&A) involving an earnout disagreement related to EBITDA. Learn about a case that highlights the complexities of earnout arrangements and potential legal challenges. June 18, 2019 M&A Stories Introduction: In this mergers…
Posted in bad faith, corporate overhead, de facto merger exception, earn outs, EBITDA Tagged with: asset purchase agreement, corporate overhead, earnout disagreements, EBITDA earnout dispute, fair dealing, Good faith, income expectations, legal challenges in M&A, M&A Disputes, M&A lawsuit, Miranda v. US Security Associates, Post-Closing Dispute
Recent Posts
- The “Stale Schedule” Risk: When a Delayed Closing Turns Honest Numbers into a Lawsuit
- Winning the Contract Argument but Losing the War: Why M&A Sellers Must Disclose Customer Losses Even When Not Technically Required
- When “Telling the Truth” Destroys Your Reputation: The “Safe Harbor” Fix Every Business Seller Needs
- The “Cash Hostage” Squeeze: The Strategic Pivot to a Restricted Setoff
- The “Freight-In” Blind Spot: You Can’t Fix What You Don’t Diagnose
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Categories
- "as is where is"
- 351 M&A transactions
- Accounting Firm Dispute Resolution
- accounting methodology
- actual knowledge
- actual notice to known creditors
- against public policy
- agreement to agree is unenforceable
- all cash deal
- allocation of preclosing taxes refunds and credits
- allocation of sales tax from transaction
- alter ego
- alter ego
- alternative dispute resolution
- ambiguous exclusion
- amortization
- anti-destruction clause
- anti-reliance clause
- anti-reliance clause
- anti-stripping covenants
- approval of franchisor
- approval of investment banking fee
- arbitration
- arbitration in employment agreements
- arbitration vs expert determination
- asbestos claims
- asset buyer's assumption of seller's liabilities by contract
- asset purchase
- asset purchase agreement
- asset seller's liabilities
- asset vs stock deal
- Assignment
- assignment of contracts
- assumed liabilities
- assumption of a contract
- assumption of contract by incorporation by reference
- attorney client privilege
- Attorney's Fee Provision
- bad faith
- bankruptcy sale
- best efforts to secure financing
- bitcoin
- blockchain
- boilerplate provisions
- bona fide offer
- book value adjustment
- books and records rep and warranty
- boot
- boot
- bootstrapping doctrine
- breach of contract
- breach of contract
- breach of contract exclusion
- breach of representations and warranties
- breach of seller's covenants
- business cards
- business judgment rule
- buyer assumption of seller liability
- Buyer beware
- buyer connected to seller insiders
- buyer equity
- buyer has no regulatory problems
- Buyer payment of seller retained liabilities
- buyer representations and warranties
- buyer's assumption of seller liabilities in asset acquisition
- buyer's covenants
- buyer's stock as currency
- buying distribution business
- C Reorganization
- Calculating Earnout Metrics
- California
- cannabis dispensary
- capitalization of cash flow
- cash
- cash and cash equivalents
- CERCLA or superfund liability
- certificate of insurance
- certificate of need
- CGL Policy
- Change of Control
- choice of law provision
- choice of law provision
- claim against seller's liability insurance
- closing
- co-author
- commercially reasonable efforts
- common interest doctrine
- compliance with all applicable laws
- compliance with law
- conditions to closing for buyer's benefit
- consent to assignment
- consent to assignment
- Consistent with past practice of acquired business
- constructive knowledge
- constructive knowledge
- continuity of enterprise exception
- continuity of ownership
- contracts
- contravene strong state public policy
- controlling shareholder fiduciary duty M&A
- copyrights
- corporate overhead
- covenant not to compete
- Covenants
- customer and supplier rep
- customer deposits
- customer due diligence
- customer list
- customer list
- cybersecurity risks
- damages
- de facto merger exception
- death of seller's impact upon noncompetition payments
- deferred closing
- 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
- discounted cash flow or DCF
- 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
- earnouts in bankruptcy
- EBITDA
- EBITDA
- economic loss doctrine
- employment agreement
- employment agreement
- enforce against nonparty
- enforceability of non-owner noncompete
- entire fairness
- environment representations and warranties
- environmental
- environmental problems
- environmental remediation
- equitable contribution
- equitable estoppel
- escrow
- Excluded Assets
- excluded liabilities
- excluded or retained liabilites
- exclusive remedy
- exclusivity provision
- excuse for untimely indemnification claim
- executory contracts
- 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
- F reorganization
- failure to make timely purchase price payment
- fair insider deal
- Family and Medical Leave Act
- FDIC approval
- federal employer liability
- federal employment discrimination liability
- federal multiemployer pension plan withdrawal liability
- federal securities fraud
- federal wage and hour violations
- fee based upon buyer debt assumption
- financial representation and warranty
- financing acquisition issues
- financing contingency
- for cause termination
- force majeure
- foreign income tax
- form over substance
- forum non conveniens doctrine
- forum selection clause
- franchise sale
- fraud
- fraud carveout
- fraud carveout
- fraud in business sale
- fraud in the inducement exception
- fraudulent concealment
- fraudulent inducement
- fraudulent intent
- fraudulent omission
- full disclosure
- full disclosure rep
- full disclosure rep
- further assurance provision
- further assurance provision
- governmental approval
- governmental approval of transaction
- Guaranty
- guaranty of related acquisition agreements
- handshake redemption obligation
- hinder, delay or defraud
- hiring seller's employees
- hybrid noncompetes
- implied assumption of seller contract/liability
- implied covenant of good faith and fair dealing
- implied duty of good faith and fair dealing
- implied warranty of merchantability
- indemnification
- indemnification cap
- indemnification for pre-closing product loss
- independent trustee
- inequitable
- insider
- insurance broker duty
- insurance coverage
- insurance requirements
- integration clause
- Intellectual Property
- Internal Revenue Code Section 1377 election
- investment banker/business broker
- joint venture
- judgement for intentional misrepresentation
- Key Employee Retention Requirement
- key employees of target
- Kovel doctrine – translator exception
- land use issues
- layoff notice law or Warn Act
- leases
- leases
- letter of intent
- liens
- liquidated damages provision
- loss payee
- lost profits
- M&A agreement
- MAE rep
- major shareholders exclusion
- material
- material contracts
- material rep and warranty breach
- Medi-Cal provider agreements
- membership interest purchase agreement
- mere continuation
- mere continuation exception
- merger
- merger agreement
- midco transaction
- minority business participation program
- misappropriation of likeness
- misleading personal financial statement
- missing attachment to acquisition document
- modification as counteroffer
- multi-employer pension plan
- mutual mistake
- mutual mistake
- negligent misrepresentation
- 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
- noncompetition covenant
- noncompetition covenant term
- nondischargeable debt in bankruptcy
- nondisclosure agreement
- 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
- oral contract
- 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
- 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
- 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 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 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 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
- 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
- retaliation
- retention bonus
- revenue and profit projections
- reverse termination or breakup fee
- Revlon doctrine
- Right of publicity
- risk of post closing payments
- 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
- signing LOI with revisions by signer
- 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
- 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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