Explore a case study where a stock seller filed a lawsuit against buyers due to a breach of stock purchase agreement. Learn about the significance of Section 1377 election and clear communication in M&A transactions. July 27, 2020 Introduction: When…
Monthly Archives: July 2020
How a Chosen Merger Structure Led to a $2 Million Tax Impact for the Seller
Explore a case study where a business owner’s merger decision resulted in a substantial tax impact of over $2 million. Learn how the chosen deal structure influenced tax outcomes and the implications for buyers and sellers. Seek expert tax advice…
Posted in boot, cash, form over substance, merger, substance over form, tax deferred reorganization Tagged with: business acquisition taxes, business sale taxes, business transaction taxes, buyer-seller transactions, deal structure impact, expert tax advice, IRS tax disputes, M&A tax implications, merger tax consequences, Michael Tseytin v. Commissioner of Internal Revenue, substance over form, tax burdens in mergers, tax implications of mergers and acquisitions, tax planning, tax-efficient deal structures
Buyer’s Right to Sue Sellers for $9 Million in Pre and Post-Sales Tax Liabilities in M&A Deal
Explore a case study where a buyer’s right to sue sellers for $9 million in pre and post-sales tax liabilities was examined in an M&A deal. Learn about the legal arguments, court decisions, and the implications for similar situations. July…
Posted in fraud carveout, post-closing sales tax, pre-closing sales tax, sales tax risk Tagged with: buyer's right to sue sellers, Court decision, escrow funds, fraud exception, indemnification, Legal dispute, M&A deal, post-closing period, sales tax liabilities, tax audit, tax representations, warranty breach
Typo Leads to Legal Dispute: Stock Seller Sues Buyer for Tax Refund for Target’s Pre-Closing Operations
Explore a legal case where a simple typo in an acquisition agreement led to a complex dispute. Learn about the conflict, the legal arguments, and the court’s decision in Heritage Handoff Holdings, LLC v. Fontanella. July 10, 2020 Introduction: Acquisition…
Posted in allocation of preclosing taxes refunds and credits, stock purchase agreement, typo or scriverner's error Tagged with: Acquisition Documents, Delaware Federal District Court, Heritage Handoff Holdings, legal case analysis, Legal dispute, legal practitioner insights, LLC v. Fontanella, M&A legal blog, mistake in contract, payment discrepancy, pre-closing operations, stock purchase agreement, Summary judgment, tax refund
Buyer Refunded $3.5M Due to Unemployment Tax Issue in M&A Deal
Learn about a legal case where a buyer was refunded $3.5 million due to an unemployment tax issue that arose after an M&A deal. Understand the importance of considering unemployment compensation tax when acquiring a business with employee turnover. July…
Posted in seller's unemployment experience rating, successor liability Tagged with: Business acquisition, business assets, buyer refund, employee turnover, human resource service provider, legal battle, Legal Case, M&A deal, successor employer, Texas Workforce Commission, unemployment compensation tax, unemployment tax issue
Selling Company’s $309 Million Stock Profit Might Avoid California Franchise Tax as Nonbusiness Income
Explore the tax implications of a $309 million stock sale and California Franchise Tax. Gain insights into the Fidelity National Info. Services, Inc. v. Franchise Tax Board case and how it impacts cross-state stock sales. July 8, 2020 Introduction: When…
Posted in nonbusiness income/sale of subsidiary, state franchise/income tax, unitary business Tagged with: business income, California Franchise Tax, cross-state stock sale, Fidelity National Info. Services, Inc. v. Franchise Tax Board, legal insights, M&A legal blog, nonbusiness income, state tax agencies, Stock sale, tax implications, tax risk
Managing Sales Tax Risks When Buyer Operates Retail Liquor Business Before Closing in M&A Deals
Learn about the legal complexities and risks associated with sales tax in M&A transactions involving retail liquor businesses. Understand the importance of proper tax reporting during transitional arrangements. July 8, 2020 Introduction: When selling a business that involves a liquor…
Posted in pre-closing management agreement, seller owner responsibility for underreported sales tax Tagged with: Government approvals, Legal dispute, liquor license, M&A deals, management agreement, Ohio sales tax, Painter v. Testa, retail liquor business, sales tax risks, tax compliance, tax liabilities
Ensuring Payment of Foreign Taxes in M&A Escrow: Lessons from a Legal Case
Explore a legal case that highlights the importance of addressing foreign tax liabilities in M&A deals. Learn from an $80 million acquisition where inadequate management of escrow arrangements led to a dispute over unpaid Mexican income taxes. Wednesday, July 1,…
Posted in escrow, foreign income tax Tagged with: Acquisition, Buyer's Interests, Case Study, comprehensive escrow agreement, escrow arrangement, escrow funds, foreign taxes, Legal Case, Legal dispute, Lessons learned, M&A, Mexican income tax, Mexican subsidiaries, New York State Court, post-closing period, Publications Intl. v. Phoenix Intl. Publs., statute of limitations, tax liabilities
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