Sound legal guidance in mergers and acquisitions helps protect business assets, minimize liabilities, and create defensible transaction structures. Skilled review of contracts, liabilities, and regulatory obligations reduces unexpected costs and litigation risk while fostering smoother negotiations and clearer post-transaction governance, which supports long-term value and operational stability for owners and stakeholders.
When the same counsel leads negotiations, strategy remains consistent across documents and stages, reducing contradictory positions and protecting bargaining leverage. That consistency streamlines communications with opposing parties and expedites resolution of terms that often cause delays when handled piecemeal.
Hatcher Legal focuses on business and estate law, offering transactional experience aimed at achieving clients’ commercial goals. We emphasize clear communication, practical solutions, and thorough documentation to protect value throughout negotiations and after closing, adapting our services to the scale and complexity of each matter.
After closing, we assist with contractual enforcement, indemnity claims, and dispute resolution procedures specified in the agreement. Prompt handling of claims and clear timelines for resolution preserve relationships and limit the financial impact of post-transaction issues.
Timelines vary based on transaction complexity, regulatory requirements, and diligence scope. Small asset purchases with few third-party consents can close within a few weeks, while larger deals involving multiple parties, financing arrangements, or sector-specific approvals often require several months. Planning realistic timelines early, prioritizing critical consents, and coordinating document requests are essential to avoid unnecessary delays and keep the process moving toward closing.
An asset purchase transfers chosen assets and typically allows the buyer to avoid most preexisting liabilities, subject to contract novations and statutory obligations. A stock purchase transfers ownership of the selling company’s shares, generally conveying assets and liabilities together. Choice of structure affects tax treatment, required consents, and the mechanics of transferring licenses or customer contracts, so consider legal and tax implications when selecting a form for the transaction.
Due diligence for a small business should review financial statements, tax returns, material contracts, customer and supplier relationships, outstanding litigation, intellectual property rights, and employee obligations. Identifying contingent liabilities early helps avoid surprises and informs negotiation of price and indemnities. Focus on contract assignment requirements, lease transferability, unresolved regulatory issues, and the conditions for third-party consents to ensure the buyer can operate the business post-closing without interruption.
Purchase prices can be structured as fixed cash payments, stock consideration, or a mix, and may include holdbacks, escrows, or earn-outs tied to future performance metrics. Earn-outs allocate risk and bridge valuation gaps by tying part of the price to future results. Drafting precise performance metrics, dispute resolution mechanisms, and payment timing in the agreement reduces disagreements and helps enforce the parties’ intent if post-closing performance determines additional compensation.
Some transactions require regulatory filings or approvals depending on industry, transaction size, and potential antitrust issues. Local permits, professional license transfers, and sector-specific approvals may also apply, so assessing regulatory obligations early prevents surprises at closing. Counsel helps identify required filings and deadlines, prepares submissions, and coordinates with regulators to seek timely approvals or exemptions when applicable to the transaction’s structure and scope.
Indemnity provisions, representation limits, escrows, and insurance are common methods to allocate responsibility for undisclosed liabilities. Careful drafting sets thresholds, caps, and procedures for claims, balancing the buyer’s protection with the seller’s willingness to accept post-closing exposure. Documenting known issues in disclosure schedules and negotiating appropriate financial protections reduces the likelihood of contentious claims and clarifies remedies and timelines for resolving any post-closing disputes.
Employment matters affect purchase structure, especially where employees transfer or where benefit plans, severance, or union agreements exist. Review of employment contracts, noncompete agreements, and benefit obligations is necessary to understand assumed liabilities and continuity obligations. Addressing employee retention, transitional service arrangements, and notice requirements in the purchase documents and integration plans helps preserve workforce stability and reduces operational disruption after closing.
Noncompete and non-solicitation covenants are commonly included to protect goodwill and customer relationships, though enforceability depends on state law and reasonableness in scope and duration. Tailoring restrictions to legitimate business interests increases the likelihood they will be upheld. Counsel can draft covenants that balance enforceability with necessary protections, coordinate with compensation or earn-out structures, and consider alternatives like confidentiality agreements where noncompete limitations are inappropriate.
An indemnity obligates one party to compensate the other for losses arising from breaches of representations or specified liabilities. Indemnity clauses typically set notice procedures, mitigation duties, thresholds for claims, and caps on liability to define how and when claims are resolved. Careful negotiation of indemnity scope and limits protects parties from disproportionate exposure while providing a clear process for addressing losses discovered after closing, including arbitration or litigation remedies if necessary.
Valuation involves reviewing financial statements, market comparables, asset values, and future earnings projections. Buyers and sellers often use negotiated mechanisms to bridge valuation differences, like earn-outs, price adjustments, or holdbacks tied to working capital targets. Engaging financial advisors alongside legal counsel ensures valuation assumptions are well documented and that transactional terms reflect those assumptions to align incentives and reduce disputes post-closing.
