M&A earnouts pose significant risks for sellers, especially when buyers control post-closing business performance. This blog examines a case where a seller lost a $5 million earnout after a private equity buyer moved key employees to a separate management company.…
Blog Archives
Earnouts and the Importance of Key Employee Retention
Posted in Key Employee Retention Requirement, problems with earnouts Tagged with: Acquisition Agreements, acquisition structuring, Breach of contract, Business acquisitions, Contract Obligations, Delaware Superior Court, earnout litigation, EBITDA targets, financial performance in M&A, key employee retention, Legal Risks in M&A, M&A Dispute Resolution, M&A earnouts, management company strategy, Post-closing disputes, post-closing employment issues, private equity acquisitions, private equity roll-ups, purchase agreement enforcement, seller protections
Undisclosed Founder Loan Leads to Post-Merger Liability
Undisclosed shareholder loans can become post-merger liabilities, creating unexpected financial exposure for buyers. This blog explores a real M&A case where a founder’s unrecorded loan led to legal disputes after a merger. Learn how courts interpret implied repayment obligations, why…
Posted in Problems with Undisclosed Liabilities Tagged with: Acquisition Agreements, asset vs. stock purchase, balance sheet risks, Business acquisitions, business law, corporate finance, deal structuring, due diligence, founder loans, implied contracts, legal pitfalls in M&A, M&A Disputes, M&A litigation, merger liabilities, New York M&A Cases, post-closing risks, private company M&A, shareholder loans, startup funding, undisclosed liabilities
When Private Equity’s Global Strategy Undermines Earnouts
This blog delves into the legal complexities of earnouts in private equity acquisitions, using a recent Delaware Superior Court case as a key example. It explores the risks sellers face when private equity firms orchestrate strategic decisions that negatively affect…
Posted in private equity, problems with earnouts Tagged with: Acquisition Agreements, affiliate immunity, breach of earnout, Business acquisition, buyer group, corporate group law, Delaware law, Delaware Superior Court, Earnout disputes, Earnout Provisions, earnouts, EBITDA performance, M&A acquisitions, M&A Legal Risks, PE firm accountability, PE firm liability, portfolio company, Private Equity, private equity sponsor, Punitive damages, seller protections, strategic decisions, tort claims, tortious interference
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
M&A Health Care Seller Fights Large Buyer over Medicare and Medicaid Reconciliation
In this blog post, we delve into the complexities of selling a healthcare business, particularly focusing on a recent M&A legal dispute involving Medicare and Medicaid receivables. Discover how a Montana-based home health and hospice provider clashed with a large…
Posted in problems with receivables Tagged with: Acquisition Agreements, escrow, escrow in M&A, federal district court rulings, financial reconciliation, healthcare business sale, healthcare industry, healthcare mergers and acquisitions, healthcare regulations, home health and hospice care, Indemnification claims, legal strategy in M&A, M&A case studies, M&A Disputes, M&A legal issues, Medicaid receivables, Medicare receivables, post-closing receivables, prejudgment remedy, receivables management, reconciliation, Regulatory Compliance
Legal Clash: M&A Buyer and Seller Tangle in Federal Court Over Post-Closing Payment Dispute
Dive into the realm of M&A legal intricacies with our latest blog post, ‘Legal Clash: M&A Buyer and Seller Tangle in Federal Court Over Post-Closing Payment Dispute.’ Explore the nuances of acquisition agreements, post-closing conflicts, and federal court litigation as…
Posted in Problems with Deferred Purchase Price, Problems with description of purchase price Tagged with: Acquisition Agreements, Buyer-seller disputes, contract ambiguity, contract law, federal court litigation, Legal battles, legal conflicts, legal drafting, litigation resolution, M&A legal, M&A litigation, Post-closing disputes, Purchase agreements, termination clauses
BUSINESS BUYER RECOVERS DAMAGES DUE TO SELLER’S ASSETS REPRESENTATION BREACH
Buyer of manufacturing business discovers obsolete and malfunctioning equipment. Recovers damages from seller. M&A Stories September 5, 2021 Introduction: In this blog post, we discuss a case where a buyer of a manufacturing business faced issues with the purchased assets…
BUYER AWARDED DAMAGES IN BUSINESS DEAL DUE TO SELLER’S FULL DISCLOSURE BREACH
Boilerplate representation and warranty supported damage award for seller’s pre-closing failure to tell the buyer about his manufacturing company’s supply problems M&A Stories September 5, 2021 Introduction: In a private acquisition agreement, seller representations and warranties are often seen as…
Understanding When Indemnification Applies in Asset Purchase Agreements
Explore a recent case, Continental Motors, Inc. v. Danbury Aerospace, Inc., to understand how indemnification provisions in asset purchase agreements impact legal outcomes. Learn about the buyer’s strategic approach to broaden indemnification scope. April 13, 2020 Introduction: In the world…
Posted in customer deposits, direct, indemnification, sick time, third party, vacation time Tagged with: Acquisition Agreements, Asset purchase agreements, Business acquisitions, buyer's protection, Case Study, Continental Motors, Danbury Aerospace, indemnification, indemnification provision, legal outcomes, M&A legal risk, third party vs direct claims
Buyer Halts Payments, Alleges Inaccurate Financials in M&A Deal
Explore a case where a buyer halted payments in an M&A deal due to alleged financial inaccuracies, and learn about offset provisions in purchase agreements. M&A Stories March 29, 2019 Introduction: In the world of mergers and acquisitions, uncertainties loom…
Posted in asset purchase agreement, financial representation and warranty, membership interest purchase agreement, offset or setoff provision, offset right, promissory note, representations and warranties Tagged with: Acquisition Agreements, books and records representation, Borremans v. Gardner, buyer protection, escrow, financial inaccuracies, Legal Case, M&A, Mergers and Acquisitions, New York State Court, offset or setoff provision, Purchase agreement, seller dispute
Recent Comments