M&A Buyer Protection Provisions in Private M&A Purchase Agreements Beyond Indemnification for Breaches of Representations and Warranties

Purchase Price Adjustments, Contingent Payments, Accounts Receivable Repurchase, Inventory Audit, Retained Liabilities

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


Conducted on Thursday, November 21, 2019

Recorded event now available

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Program Materials

This CLE webinar will guide deal counsel in negotiating and drafting provisions in private M&A purchase agreements that provide protections to buyers after the transaction is consummated that are beyond indemnification for breaches of representations and warranties. The panel will outline approaches for purchase price adjustments, contingent and deferred consideration, past-due accounts receivable and other protections available to buyers in private M&A transactions to shift or minimize transaction risk.

Description

In many private M&A transactions, buyers tend to rely on an indemnity from sellers to compensate them for losses arising from sellers’ breach of the representations and warranties provisions in purchase agreements. Many times, sellers insist that this indemnity is the sole remedy available to buyers. Buyers and their counsel often negotiate additional protections beyond this indemnity. These buyer protection provisions include purchase price adjustments, contingent consideration, deferred consideration, past-due accounts receivable repurchase obligations, excluding certain liabilities in asset transactions, setoff rights, specific performance and claims for fraud. Counsel should stay on top of the latest thinking when it comes to these buyer protection provisions.

Listen as our panel of experienced M&A attorneys discusses strategies used by buyers to shift certain liabilities to sellers and minimize risk in private M&A transactions.

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Outline

  1. Why buyers should not rely solely on an indemnity from sellers
  2. Buyer protection provisions beyond an indemnity from sellers
    1. Purchase price adjustments
    2. Earnouts and other contingent consideration
    3. Escrows, holdbacks and other security
    4. Specific provisions for accounts receivable
    5. Specific provisions for asset deals, including excluded liabilities and ‘wrong-pockets’ provision
    6. Setoff rights
    7. Specific performance and claims for fraud

Benefits

The panel will review these and other key issues:

  • What buyers should keep in mind when it comes to negotiating purchase price adjustments in order to get the value they bargained for.
  • How buyers can leverage contingent consideration to protect themselves against risks related to the future performance of a target company.
  • When buyers should consider using escrows and holdbacks and ways buyers can minimize uncertainty when it comes to the collectability of past-due accounts receivable.

Faculty

Asaad, Danielle
Danielle Asaad

Partner
Squire Patton Boggs

A partner in the Global Corporate Practice, Ms. Asaad represents private equity sponsors and corporate clients in...  |  Read More

McDonald, John
John J. McDonald

Managing Partner
Tremont Street Partners

Mr. McDonald is presently the Managing Partner at Tremont Street Partners, a financial advisory firm based in...  |  Read More

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