Negotiating Indemnification Provisions in M&A Deals

Crafting Provisions to Allocate Transaction Risks

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


Conducted on Wednesday, November 4, 2009

Recorded event now available

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Program Materials

This seminar will discuss strategies for negotiating indemnification provisions in M&A deals to protect buyers and sellers and reduce post-closing disputes.

Description

Indemnification provisions are among the most heavily negotiated terms in merger and acquisition transactions. Failure to properly allocate risks when structuring a deal can result in unintended legal and financial exposure for buyers and sellers.

When negotiating indemnification provisions, parties must consider time, subject matter and dollar limitations; how to identify indemnitors and indemnitees; escrowed funds and setoff rights; defense of third-party claims; and payment on indemnification. The use of boilerplate language is dangerous.

Listen as our authoritative panel—including deal attorneys, an accountant and an M&A consultant—explains the impact of the buyer's market on the negotiation of indemnification provisions and offers best practices for negotiating indemnification provisions in a way that benefits and protects buyers and sellers and reduces post-closing disputes.

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Outline

  1. Current developments—impact of buyer’s market on indemnification provisions
    1. Materiality scrapes
    2. Survival periods
    3. Baskets
    4. Caps
    5. Escrow
    6. Closing deals without credit
  2. Negotiating common indemnification provisions
    1. Consequential and incidental damages
    2. Fraud exclusion
    3. Purchase price adjustment and double-dipping
  3. Dispute resolution trends and pitfalls
  4. Evaluating and addressing creditworthiness of indemnitors

Benefits

The panel will review these and other key questions:

  • What key clauses should buyers and sellers include when crafting and negotiating indemnification provisions?
  • What are the most commonly disputed issues in M&A indemnity and what are some effective strategies for resolving them?
  • How can the parties to a deal best evaluate and address the creditworthiness of indemnitors?

Faculty

Todd B. Pfister
Todd B. Pfister

Partner
Foley & Lardner

He has significant experience representing public and private entities in merger and acquisition transactions. He...  |  Read More

Kevin D. Kreb
Kevin D. Kreb
Partner
PricewaterhouseCoopers

He consults with clients regarding the resolution of disputes arising from merger and acquisition transactions,...  |  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

Catherine B. Nelson
Catherine B. Nelson

Senior Counsel
Foley & Lardner

She focuses her practice on mergers and acquisitions, private equity, corporate finance and general corporate...  |  Read More

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