Engaging knowledgeable M&A counsel improves negotiation leverage, uncovers material liabilities through targeted due diligence, and ensures enforceable agreements. Counsel can design indemnity provisions, escrow arrangements, and tax-conscious structures that protect client interests, manage closing conditions, and facilitate post-closing integration to preserve business continuity and long-term value.
A full-service approach uncovers hidden liabilities through thorough due diligence and tailors contractual protections to address those findings. This diligence reduces the likelihood of unexpected claims or regulatory setbacks that can derail integration plans and diminish the anticipated economic benefits of the transaction.
Hatcher Legal combines transactional insight with clear communication to help clients navigate contract negotiation, due diligence, and closing mechanics. We tailor our approach to each client’s goals and budget, providing pragmatic legal solutions designed to preserve value and reduce the risk of post-closing disputes.
After closing, we assist with employment transitions, buyer-seller obligations, and enforcement of indemnities. Prompt attention to integration and claims resolution protects value and helps preserve relationships with customers, employees, and vendors during ownership changes.
An asset purchase transfers specific assets and liabilities designated in the agreement, allowing buyers to avoid some unwanted obligations, while a stock purchase transfers ownership of the company’s equity and typically conveys its entire liability portfolio. Buyers must weigh tax consequences, creditor claims, and the need for third-party consents when choosing the structure. Sellers often prefer stock sales for tax and simplicity reasons, but buyers may prefer asset purchases to limit successor liability. Counsel should evaluate tax implications, required consents, and the practical effect on contracts, licenses, and permits to select the best approach for both parties.
Transaction timelines vary widely based on deal complexity, diligence scope, financing, and regulatory approvals, ranging from a few weeks for small asset deals to several months for complex or regulated transactions. Clear objectives, early diligence, and cooperative counterparties accelerate progress, while financing contingencies and antitrust reviews extend timelines. Engaging counsel early helps set realistic deadlines and manage timelines by identifying critical path items and coordinating with lenders, accountants, and regulators. Proper planning around due diligence and closing conditions reduces the likelihood of unexpected delays at closing.
Buyers should focus on financial statements, contracts with key customers and suppliers, employment and benefit obligations, intellectual property ownership, pending litigation, and regulatory compliance to identify material liabilities and integration challenges. Prioritize items that affect revenue continuity and contingent liabilities that could impact valuation. Organized diligence with a clear document request list and prompt follow-up accelerates findings and allows buyers to negotiate appropriate indemnities, price adjustments, or escrows to address identified risks, protecting the buyer’s post-closing position and enabling informed pricing decisions.
Sellers can limit post-closing exposure by negotiating reasonable indemnity caps, baskets, and survival periods, providing accurate disclosure schedules, and obtaining release language for known liabilities. Structuring the transaction with appropriate warranties and a carefully drafted limitation of liability reduces the likelihood of extended claims after closing. Using escrows or holdbacks and negotiating specific carve-outs for known contingent liabilities balances buyer protection with seller certainty. Proper disclosure and transparent communication prior to closing can also reduce assertions of fraud or misrepresentation that often underpin post-closing claims.
Certain transactions require regulatory notifications or approvals depending on the industry, transaction size, and jurisdiction; examples include antitrust filings, securities filings, and industry-specific approvals for regulated businesses. Early legal review identifies which governmental consents or notices are necessary to avoid enforcement actions or delays at closing. Counsel coordinates required filings and timelines, works with specialized advisors when needed, and integrates compliance tasks into the closing checklist to ensure that regulatory prerequisites are satisfied prior to or immediately after closing as the agreement specifies.
Purchase prices can be structured as a lump sum at closing, installment payments, earnouts tied to future performance, or a combination including escrowed amounts. Each structure allocates risk differently, with earnouts aligning buyer and seller incentives while escrows and holdbacks protect buyers against undisclosed liabilities. Selecting an appropriate payment structure depends on valuation certainty, confidence in financial projections, and parties’ tolerance for post-closing adjustments. Counsel helps draft mechanisms for calculating adjustments, triggering payments, and resolving disputes over earnout metrics or performance measurements.
Employment agreements preserve key personnel and define roles, compensation, and termination arrangements after a transfer of ownership. These agreements can include non-compete and non-solicitation provisions tailored to protect the acquired business’s customer base and intellectual property while complying with applicable state law limits. Counsel drafts or reviews retention and severance arrangements to align employee incentives with integration goals, mitigate turnover risk, and address obligations under employment laws and benefit plans, reducing operational disruption during the transition period following closing.
Common closing conditions include accuracy of representations and warranties, absence of material adverse changes, receipt of necessary consents, completion of agreed-upon deliverables, and satisfaction of regulatory approvals. Clear definition of these conditions provides certainty about what must occur before funds and ownership change hands. Counsel negotiates conditions that are achievable and fair, incorporating remedy mechanisms and cure periods for breaches. Balancing buyer protections with practical closing mechanics helps prevent impasses that can delay or derail transactions when conditions are not precisely defined.
Disputes over representations and warranties are typically addressed through contract remedies such as indemnification claims, escrowed funds, or arbitration clauses. The purchase agreement should specify claim procedures, notice requirements, and dispute resolution forums to avoid protracted litigation and provide predictable remedies. Negotiating clear caps, deductibles, and survival periods can limit exposure and encourage early resolution. Counsel assists in drafting enforceable claim mechanisms and can recommend alternative dispute resolution methods to preserve business relationships and reduce the cost and time of resolving disagreements.
A seller can structure a transaction to retain certain liabilities or assets by carving them out of the sale agreement and expressly identifying retained obligations. This approach must be negotiated and clearly set forth so buyers understand what they are acquiring and what remains with the seller, reducing ambiguity and future dispute risk. Counsel ensures retained liabilities are properly disclosed and reflected in purchase price adjustments or indemnity provisions when necessary. Proper documentation and transfer mechanics for excluded assets or obligations help both parties implement the intent of the transaction without unintended successor claims.
