Effective legal support in mergers and acquisitions protects transaction value, clarifies liabilities, and creates enforceable obligations that survive closing. Counsel coordinates due diligence, allocates risk through indemnities and representations, and negotiates deal structure to align incentives, helping minimize post-transaction litigation and ensuring continuity for management, employees, and customers.
Full representation ensures that representations, warranties, and indemnities are negotiated with an informed view of the target’s risks. Clear allocation of responsibility reduces the likelihood of costly disagreements after closing and simplifies remedies if issues arise.
Clients value responsive communication, thoughtful deal structuring, and disciplined document drafting that preserves business value. Our approach emphasizes clarity in representations and indemnities, sensible risk allocation, and practical integration planning to protect client interests through closing and beyond.
After closing, we support dispute resolution, oversee escrow releases, and assist with contract novations or regulatory follow-up. Continued attention to post-closing obligations helps resolve claims efficiently and protect clients against lingering liabilities.
An asset sale transfers specific assets and liabilities identified in the purchase agreement rather than ownership of the company itself. Buyers can select which assets and liabilities to assume, which can limit exposure to unknown obligations but may require third-party consents to assign certain contracts. In a stock sale, the buyer acquires ownership of the target entity through stock transfer, inheriting its historical liabilities and contracts. Stock sales can be simpler for contract continuity but typically require more comprehensive due diligence and negotiated indemnities to address pre-closing risks.
Transaction timelines vary based on deal complexity, due diligence scope, financing arrangements, and regulatory requirements. Simple transactions may close in a few weeks, while complex deals involving multiple jurisdictions, regulatory review, or detailed tax planning can take several months. Early preparation of diligence materials, clear timelines in the LOI, and proactive coordination between advisors can significantly shorten the timeline and reduce surprises that would otherwise delay closing and increase transaction costs.
Due diligence typically includes review of financial statements, tax returns, corporate governance records, contracts, leases, employment agreements, intellectual property, litigation history, and regulatory compliance. The goal is to identify hidden liabilities, contractual restrictions, and areas needing adjustment in deal terms. Industry-specific considerations such as environmental, licensing, or healthcare compliance may require specialized review. Findings shape purchase agreement provisions, indemnity language, and escrow terms to allocate risk and protect buyer value.
Purchase price adjustments reconcile the final economic position of the business between signing and closing, often using metrics like working capital, debt levels, or cash on hand. Mechanisms include true-up calculations, escrow holdbacks, or post-closing payments to reflect actual financial conditions. Clear definition of calculation methods, timing, and dispute resolution procedures in the purchase agreement prevents disagreements and ensures both parties understand how adjustments will be computed and settled after closing.
Buyers typically request representations and warranties about financial statements, title to assets, compliance with laws, tax matters, and the absence of material undisclosed liabilities. Indemnity provisions, escrows, and survival periods create remedies for breaches discovered after closing. Buyers may also seek covenants requiring seller assistance with transition, non-compete or non-solicitation clauses, and specific closing deliverables. Negotiation of these protections balances buyer risk with seller desire for finality and closure.
Tax considerations influence whether a transaction is structured as an asset or stock sale. Asset sales can provide buyers with step-up in tax basis but may create tax liabilities for sellers; stock sales often have different tax implications for both parties and may be preferred for certain ownership transitions. Tax advisors should be engaged early to analyze consequences and recommend structures that align with financial objectives, potentially incorporating deferred payments, earnouts, or indemnity allocations to address tax exposure.
Escrow and indemnity clauses allocate responsibility for breaches or undisclosed liabilities after closing. Escrows secure funds for potential claims, while indemnity provisions define the scope, limits, and procedures for recovering losses caused by breaches of representations or covenants. Carefully negotiated caps, baskets, and survival periods balance buyer protection with seller finality, ensuring claims are addressed fairly and within agreed procedures to reduce protracted disputes following closing.
Legal counsel should be involved early in succession planning to integrate business, tax, and estate considerations into a cohesive plan. Early involvement ensures ownership transitions align with governance documents, minimizes tax and family disputes, and preserves business continuity during leadership changes. Counsel helps draft buy-sell agreements, transfer mechanisms, and governance updates that reflect succession goals while protecting minority interests and facilitating smooth transitions for employees and clients.
Many contracts can be transferred to a buyer, but assignments often require third-party consent depending on contract terms. Leases, supplier agreements, and customer contracts may include anti-assignment clauses or notice requirements that must be addressed to ensure continuity. Counsel reviews contract language early to identify required consents and negotiates with counterparties to obtain necessary approvals or structure workarounds, reducing the risk of post-closing disruptions to operations and revenue streams.
If post-closing liabilities emerge, the purchase agreement’s indemnity and escrow provisions determine remedies, including claims procedure, recovery limits, and dispute resolution mechanisms. Timely notice and adherence to contractual claim processes are essential to preserve rights under the agreement. Where the agreement is insufficient, parties may pursue negotiation, mediation, or litigation to resolve disputes. Well-drafted post-closing protections and clear contractual procedures generally reduce the need for protracted disputes and support efficient resolution.
