Pursuing or Defending Against M&A Post-Closing Indemnification Claims: Guidance for Deal Counsel

Evaluating Claims, Navigating the Process, Leveraging Claim and Damages Limitations, and More

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


Conducted on Thursday, October 27, 2016

Recorded event now available

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Program Materials

This CLE webinar will provide guidance to deal counsel pursuing or defending against post-closing indemnification claims alleging breaches of representations, warranties and covenants contained in purchase agreements for M&A transactions, whether relating to issues identified by the buyer or as a result of third-party claims. The panel will discuss practical tips for evaluating how to formulate an indemnification claim, the process for pursuing and defending claims, and procedural and substantive strategies for buyers and sellers embroiled in indemnification disputes.

Description

Post-closing indemnification claims are common in M&A transactions involving acquisitions of privately held companies. For buyers, they can be a crucial way to recoup value lost due to seller misrepresentations concerning the acquired business. For sellers, they can result in exposure to millions of dollars in liabilities after the acquisition has closed. When a buyer becomes aware of a seller's alleged breach of the purchase agreement's representations, warranties or covenants, the buyer may have the right to pursue an indemnification claim against the seller for the indemnifiable losses it has suffered, on the terms and conditions contained in the purchase agreement.

When evaluating whether to pursue an indemnification claim, buyers and their counsel must understand how the claim process works, as well as common challenges buyers face in evaluating potential bases for indemnification claims, preparing the claim notice and resolving the claim. Similarly, sellers and their counsel must develop strategies for responding to indemnification claims, including arguing for the applicability of deductibles, caps, materiality and material adverse effect (MAE) thresholds, time limits by which claims must be brought, limitations on indemnifiable damages, anti-sandbagging provisions, and more.

Listen as our authoritative panel discusses key legal considerations and strategies for buyers, sellers and their counsel for asserting or defending against post-closing indemnification claims in M&A transactions.

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Outline

  1. Buyer considerations in evaluating how to formulate an indemnification claim
  2. Navigating the indemnification claim process
  3. Strategies for asserting or defending claims—buyer and seller perspectives
    1. Procedural
    2. Substantive

Benefits

The panel will review these and other key issues:

  • What are some common bases for post-closing indemnification claims in M&A transactions?
  • What are some considerations and best practices for buyers pursuing indemnification claims?
  • What are some strategies for sellers to most effectively defend against indemnification claims?

Faculty

McDonald, John
John J. McDonald

Partner
Troutman Sanders

Mr. McDonald counsels clients on a full range of corporate transactional matters, focusing on private equity and...  |  Read More

Elisa P. McEnroe
Elisa P. McEnroe

Morgan Lewis & Bockius

Ms. McEnroe litigates commercial contract disputes and indemnification issues that arise from matters involving...  |  Read More

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