M&A Post-Closing Disputes: Minimizing and Resolving Disputes Over Working Capital Adjustments and Earnouts

Recording of a 90-minute CLE webinar with Q&A


Conducted on Wednesday, November 1, 2017

Recorded event now available

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Program Materials

This CLE webinar will examine the common causes of M&A post-closing disputes regarding working capital adjustments and earnouts. The panel will discuss strategies for mitigating the likelihood of post-closing disputes, and considerations and best practices for resolving them.

Description

More than half of all M&A deals result in post-closing disputes related to purchase price, earnouts, indemnity, misrepresentations or breach of warranties.

Common allegations in disputes over working capital adjustments and earnouts are that the seller’s estimate of working capital was arbitrary, the seller’s financial statements do not comply with generally accepted accounting principles (GAAP), the seller failed to disclose material contingencies or liabilities, or the target business was not operated as represented. Even when earnout provisions are carefully drafted, post-closing disputes can arise.

While post-closing disputes are unavoidable, they can be minimized by clearly outlining in the M&A purchase agreement the parties’ agreed-upon accounting standards, whether GAAP or another standard; simplifying valuation calculations and limiting the number of variables; using objective rather than subjective terms in the purchase agreement; and addressing how disputes will be resolved as a part of the purchase agreement.

Listen as our authoritative panel discusses recent developments regarding M&A post-closing disputes over working capital adjustments and earnouts, and explains best practices for minimizing and resolving disputes.

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Outline

  1. Common drivers of M&A post-closing disputes over purchase price and earnouts
  2. Best practices to minimize disputes
  3. Options and considerations for resolving disputes

Benefits

The panel will review these and other key issues:

  • What are the common reasons for and allegations involved in M&A post-closing disputes over working capital adjustments or earnouts?
  • How can counsel minimize the likelihood of M&A post-closing disputes?
  • What are the common processes for resolving M&A post-closing disputes and the pros and cons of each?

Faculty

Brow, Gregory
Gregory S. Brow

Partner
Dentons US

Mr. Brow represents publicly-traded corporations, privately-held businesses, and corporate executives in complex...  |  Read More

Litvak, Jeff J.
Jeff J. Litvak

Senior Managing Director—Forensic Litigation
FTI Consulting

Mr. Litvak specializes in accounting and valuation matters, assessment of economic damages, analysis of lost...  |  Read More

Majumder, Bobby
I. Bobby Majumder

Partner
Perkins Coie

Mr. Majumder's practice focuses on corporate and securities transactions. He represents underwriters, placement...  |  Read More

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