Selling a auto dealership with a planned buyer relocation can complicate obtaining the automaker’s consent to the transaction. M&A Stories December 9, 2024 Selling a car dealership requires automaker consent, and state laws generally require automakers to act with “good…
Blog Archives
The Risks of Earnouts with Buyers Who Compete
Earnouts are risky, especially when your buyer has a pre-existing competitive business. M&A Stories December 6, 2024 In 2019, a seller of athletic event registration software agreed to sell its assets to a buyer in the same industry. The transaction…
Posted in problems with earnouts Tagged with: asset purchase agreement disputes, athletic event software industry, business acquisition legal risks, buyer conflict of interest, commercial reasonableness in M&A, competing businesses in acquisitions, Delaware court decisions, Earnout agreements, M&A legal disputes, post-closing obligations, protecting seller earnouts, revenue diversion, seller risks in M&A, small business M&A challenges
Buyer’s Forum Selection Clause Strategy Backfires in Baseball Program Acquisition
This blog examines the impact of a permissive forum selection clause in an M&A asset purchase agreement, focusing on a case where a Nebraska buyer acquired a Texas-based youth baseball organization. The clause allowed the buyer the option, but not…
Posted in forum selection clause Tagged with: asset purchase agreement disputes, buyer litigation strategies, drafting M&A contracts, forum selection clause risks, jurisdictional risks in M&A, legal risks in contract clauses, M&A forum selection clauses, Nebraska business law, permissive forum selection, Texas M&A disputes
Buyer-Friendly Earnout Provision Shields Buyer from Seller’s Claim
This blog dives into a key M&A case from the Delaware Court of Chancery that underscores the importance of earnout clauses in asset acquisition deals. It centers on a $1.7 million acquisition in the data management sector, where the buyer…
Posted in problems with earnouts Tagged with: acquisition terms in M&A, asset acquisition case, buyer discretion in M&A, buyer-friendly earnout provision, buyer’s interests in acquisitions, Delaware Court of Chancery, earnout clause interpretation, earnout clause protection, M&A case study, M&A legal disputes, M&A legal strategies, Post-closing disputes, protective M&A terms, revenue-based earnouts, Seller Claims, Walmart contract data management
Due Diligence Gives Buyers the Right to Walk Away from a Bad Deal
This blog post explores the critical role of due diligence in mergers and acquisitions, illustrating how it can empower buyers to withdraw from disadvantageous deals. It recounts a cautionary case involving the purchase of a nutritional supplement company, emphasizing the…
Posted in due diligence, fraud in business sale Tagged with: assessing seller claims, asset acquisition challenges, business sale litigation, buyer protection strategies, buyer's option to walk away, Buyer's rights in M&A, case studies in M&A, fraud defense in M&A, independent testing in mergers, legal aspects of acquisitions, Legal disputes in M&A, M&A Due Diligence, nutritional supplement industry acquisitions, protein content discrepancies, recent M&A legal cases, valuation in mergers and acquisitions
Fraud Damages in Asset Sale Not Discharged in Bankruptcy
This blog explores the legal ramifications of fraud in M&A transactions, specifically focusing on a case where a seller’s fraudulent misrepresentations led to significant financial damages that were deemed non-dischargeable in bankruptcy. It highlights the importance of accurate disclosures during…
Posted in judgement for intentional misrepresentation, nondischargeable debt in bankruptcy Tagged with: asset purchase agreement fraud, asset sale litigation, bankruptcy court fraud rulings, business owner liability in sales, business sale misrepresentation, commercial cleaning business sale, fraud damages, fraudulent asset sale, fraudulent financial statements, legal consequences of M&A fraud, M&A Disputes, M&A Fraud, misrepresentation in financial statements, Nebraska bankruptcy court ruling, Non dischargeable debt in bankruptcy, Non-Disclosure in M&A, SBA loan fraud, seller liability in asset sales
M&A Buyer Loses Products Liability Indemnification Claim Against Seller
In the complex landscape of mergers and acquisitions, understanding the legal implications of product liability is crucial for asset buyers. This blog post explores a recent South Carolina case where a buyer faced unexpected legal challenges due to a defect…
Posted in problems with products liability claims Tagged with: Asset Buyers, buyer responsibilities, Byers v. Pinnacle Converting Equipment, equipment safety, extended reporting periods, Indemnification claims, industrial machinery, Insurance Coverage, Legal Risks, liability insurance, M&A legal topics, manufacturing defects, Mergers and Acquisitions, post-acquisition claims, product liability, representations and warranties insurance, Risk management in M&A, slitter rewinders, South Carolina federal court, tail coverage
Earnouts: The Importance of Clear Buyer Obligations
This blog explores the complexities of earnout structures in M&A deals, emphasizing the need for sellers to negotiate clear post-closing obligations. Using a real-life Delaware court case, the post highlights how vague earnout terms can lead to disputes and legal…
Posted in problems with earnouts Tagged with: acquisition contract disputes, Breach of contract in M&A, buyer obligations in acquisitions, commercial reasonable efforts in earnouts, Delaware court M&A rulings, earnout litigation, earnouts in acquisitions, implied covenant of good faith, M&A Disputes, M&A Legal Cases, post-closing obligations, purchase agreement obligations
Texas Upholds Asset Acquisition Formality: Successor Liability Limited to Assumed Seller Liabilities
Explore the intricacies of M&A legal topics with our latest blog post, “Texas Upholds Asset Acquisition Formality: Successor Liability Limited to Assumed Seller Liabilities.” This piece delves into the unique legal landscape of Texas, contrasting its strict adherence to the…
Posted in problems with successor liability Tagged with: Acquisition Agreements, Asset acquisition, Business acquisitions, business bankruptcy, buyer protections, choice of law provision, Contractual obligations, Corporate governance, creditor claims, creditor-friendly laws, industry regulations, Legal Strategies, liability assumptions, M&A, merger implications, successor liability, Texas courts, Texas law, tort liabilities, transaction structuring
Delaware Court Awards Over $1 Billion in Earnout Dispute Over Surgical Robot Milestones
This blog covers a Delaware Court of Chancery case involving a $1 billion earnout dispute over FDA milestones in the acquisition of a surgical robotics startup. The post highlights key legal issues such as earnout provisions, commercially reasonable efforts obligations,…
Posted in problems with earnouts Tagged with: and corporate fraud in M&A, Commercially reasonable efforts, competing products, Delaware Court of Chancery, earnout dispute, FDA approval, implied covenant of good faith, M&A litigation, Medical device acquisition, merger agreement, post-closing litigation, regulatory milestones, surgical robots, venture-backed startups
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