Effective M&A counsel secures business value by addressing due diligence gaps, structuring tax-efficient deals, and drafting clear representations and indemnities that allocate risk appropriately. Legal oversight during negotiations and closing prevents costly surprises, expedites financing and regulatory clearances, and ensures transfer of assets and contracts while preserving employee and customer continuity.
Thorough negotiation of representations, warranties, and indemnities delivers clearer risk sharing and reduces ambiguity that commonly triggers post-closing disputes. Predictable contractual remedies and defined claim processes protect transaction proceeds and reduce uncertainty for both buyers and sellers.
We provide tailored negotiation support and document drafting focused on protecting client interests while keeping deals moving. By anticipating common transaction pitfalls and proposing pragmatic contractual solutions, we help clients reach agreement efficiently without sacrificing essential protections required for post-closing certainty.
Post-closing work includes administering escrow claims, monitoring survival periods for representations, and advising on covenant performance and integration obligations. Prompt attention to these matters prevents disputes and resolves contingent liabilities in line with contractual remedies.
An asset sale transfers selected assets and specified liabilities, allowing the buyer to pick which contracts and obligations to assume, which can limit future exposure. Sellers often retain undesired liabilities and wind down a separate legal entity, which can have tax and operational implications. A stock sale transfers ownership interests in the target company and typically conveys all assets and liabilities as a package. Buyers assume existing obligations unless otherwise negotiated, and sale proceeds flow to shareholders. Counsel evaluates tax, consent, and liability consequences to recommend the best structure for each party’s goals.
Transaction timelines vary significantly based on complexity, size, and regulatory needs. Small, straightforward asset deals can close in a few weeks to a couple of months when parties are aligned and diligence is limited, while larger or regulated transactions often require several months to complete. Key timeline drivers include the scope of due diligence, need for third-party consents, financing arrangements, and antitrust or industry-specific approvals. Proactive planning, clear timelines in term sheets, and coordinated advisor efforts shorten the process and reduce closing surprises.
Due diligence typically assesses financial statements, tax filings, material contracts, litigation risk, intellectual property ownership, employee matters, and regulatory compliance to uncover liabilities and valuation issues. Buyers use diligence to validate assumptions and identify representations or indemnities needed to allocate risk. Counsel organizes diligence requests, reviews responses, and advises on material findings that affect price or terms. Targeted diligence prioritizes high-impact areas to control time and cost while ensuring sufficient information to negotiate effective protective provisions in the purchase agreement.
Purchase price adjustments commonly reconcile working capital, net debt, and other balance sheet items between signing and closing. Agreements set formulas for calculating adjustments and timelines for post-closing reconciliation, often with dispute resolution mechanisms to handle disagreements efficiently. Escrows or holdbacks may secure indemnity claims or adjustment disputes, while earnouts tie a portion of the price to future performance. Negotiation focuses on clear definitions and processes to reduce ambiguity and limit post-closing disputes over calculations or assumptions.
Sellers can negotiate caps on indemnity liability, baskets or thresholds before claims are payable, limited survival periods for representations, and narrowed scope for indemnities to defined matters. Disclosure schedules that list known exceptions also limit potential claims by documenting pre-existing issues. Agreed escrow amounts and limited recourse provisions provide additional protection for sellers while still offering buyers remedies for undisclosed liabilities. These mechanisms balance reasonable buyer protection with sellers’ interest in finality and predictable net proceeds from a sale.
Whether a buyer inherits contracts and liabilities depends on transaction structure and contract terms. In asset purchases, buyers typically assume only agreed-upon obligations and require third-party consents to assign certain contracts. In stock sales, liabilities generally remain with the acquired entity unless restructured. Contractual provisions, change-of-control clauses, and consent requirements determine transferability of key agreements. Counsel reviews contracts early to identify necessary consents and negotiates assignment language or alternative arrangements to preserve essential business relationships post-closing.
Some transactions require state-level filings such as merger certificates, business registration updates, or transfer of professional licenses, depending on entity type and industry. Additionally, regulated sectors may require agency approval before a transaction can close. Local counsel assesses required filings and coordinates with regulators and industry authorities to ensure timely compliance. Identifying these requirements early avoids inadvertent violations that could delay closing or impose penalties after the transaction is completed.
Employee and benefits transfers require careful handling of employment agreements, benefit plan liabilities, and notice or consent obligations. Some plans and contracts may require amendments or consents to effect transfers, and employee classification and wage laws must be considered to avoid liability. Counsel coordinates with human resources and benefits advisors to design transition plans that comply with ERISA and state laws, prepare required notices, and negotiate terms for retention, termination, or transfer of employees to maintain operations and minimize disputes.
Tax consequences differ between asset and stock sales: asset sales can produce taxable gains at the entity and shareholder levels, while stock sales often deliver more favorable tax treatment for sellers but may leave certain tax attributes with the target. State and federal tax implications should shape structure decisions. Working with tax professionals, counsel evaluates tax liabilities, potential step-ups in basis, allocation of purchase price, and any elections that affect post-transaction tax exposure. Early tax planning informs price negotiations and identifies strategies to reduce overall tax burden.
Transactions can be structured to maintain confidentiality through well-drafted non-disclosure agreements, limited bid processes, and controlled access to sensitive information during diligence. Careful communication plans protect customer and employee relationships until announcements are appropriate. Using staggered disclosures, encrypted data rooms, and targeted diligence teams helps reduce leaks and business disruption. Counsel advises on confidentiality protections in agreements and develops announcement strategies that support continuity while meeting contractual and regulatory obligations.
