Legal guidance in mergers and acquisitions helps ensure clear allocation of risk, enforceable contractual protections, and alignment between transaction structure and business objectives. Attorneys play a key role in drafting terms, identifying liabilities during due diligence, and designing post-closing protections such as indemnities and escrow arrangements to preserve value and reduce exposure to future claims.
Holistic legal oversight identifies contractual gaps, undisclosed liabilities, and compliance concerns that might otherwise be missed. Counsel coordinates due diligence across legal, tax, and operational domains to develop negotiation strategies and contractual protections that reflect the transaction’s commercial realities and protect client interests long term.
Hatcher Legal blends transactional knowledge with practical business judgment to support deals from negotiation through post-closing. We prioritize clear contract drafting, comprehensive due diligence, and durable protections that reflect each party’s goals, helping reduce the likelihood of disputes and preserve value throughout the transaction lifecycle.
Post-closing support includes enforcing indemnity remedies, administering escrow releases, and implementing integration plans for employees, contracts, and systems. We remain available to resolve disputes and to advise on covenant compliance, ensuring that the transition preserves value and aligns with the parties’ original objectives.
An asset sale transfers specific business assets and assumed liabilities, allowing buyers to pick and choose what they acquire and reducing exposure to unknown liabilities. Sellers may face different tax treatment based on asset allocations, and individual contracts often require assignment or consent to transfer. A stock sale transfers ownership of the entity through equity purchase, generally preserving existing contracts and liabilities. Buyers accept the company ‘as is,’ so thorough due diligence and tailored indemnities are important to address contingent liabilities and recent obligations that remain with the entity.
Transaction timing varies widely based on complexity, diligence scope, financing, and regulatory considerations. Simple asset purchases can close in a few weeks with cooperative parties, while complex deals involving multiple approvals or financing can take several months or longer to complete. Early planning, organized documents, and prompt communication among buyers, sellers, and advisors shorten timelines. Anticipating third-party consents, employment transitions, and tax planning needs during initial negotiations helps prevent last-minute delays that extend closing calendars.
Prepare clear financial statements, tax returns, corporate records, material contracts, and employee information to facilitate due diligence. Organizing intellectual property documentation, regulatory licenses, and insurance histories allows faster review and reduces buyer concerns that might affect valuation. Also assemble a realistic list of liabilities, pending litigation, and any known compliance issues. Early disclosure and remediation where possible can increase buyer confidence and simplify negotiating representations, warranties, and indemnity provisions in the purchase agreement.
Representations and warranties are contractual statements made by the seller about the business’s condition, assets, liabilities, and legal compliance. They allocate risk by defining what facts are relied upon and by triggering indemnity obligations if the statements prove false, subject to negotiated exceptions and thresholds. Parties negotiate survival periods, caps on liability, and deductible or de minimis amounts to balance protection with finality. Detailed disclosure schedules identifying known exceptions help limit future disputes and clarify the scope of indemnified claims.
Some transactions require regulatory approvals depending on industry, size, or jurisdictional rules. Antitrust review, industry-specific licensing transfers, or foreign investment clearances can impose material conditions or delays on a closing, so counsel assesses regulatory exposure early and plans for any required filings. If approvals are likely, parties may include regulatory carve-outs, suspension rights, or termination options in the agreement. Early coordination with specialists reduces surprises and may support structuring the deal to avoid certain approval thresholds where permissible.
Employee matters include transfer of employment agreements, continuation of benefit plans, and compliance with labor laws. Buyers and sellers negotiate how employees will be handled, whether offers of employment are extended, and how accrued benefits or vacation will be treated at closing. Legal counsel reviews employment contracts, noncompete agreements, and benefit plan requirements to ensure proper assignment, notices, and compliance with wage and hour rules. Transitional service agreements and retention incentives may be used to secure key personnel during integration.
Common post-closing disputes involve alleged breaches of representations and warranties, earn-out disagreements, and indemnity claims. Disputes often hinge on the accuracy of disclosures, the interpretation of contractual language, or fulfillment of post-closing covenants. Contracts typically address dispute resolution through negotiation, mediation, or litigation, and include limitations on damages and claim procedures. Clear drafting, comprehensive disclosure schedules, and realistic survival periods help reduce the incidence and severity of post-closing conflicts.
Escrow arrangements hold a portion of the purchase price in trust to secure indemnity claims or adjustments that arise after closing. Escrows provide a source of recovery for buyers while offering sellers a limited period of exposure, with funds released according to agreed timelines and claim procedures. Escrow amounts, duration, and release conditions are negotiated based on risk assessment and transaction size. Clear claims processes and thresholds reduce ambiguity and help ensure fair resolution when post-closing issues emerge.
A letter of intent establishes preliminary terms and expectations but is usually non-binding for key commercial matters. Negotiations often continue after signing an LOI, and parties frequently adjust deal points through the drafting and diligence process as new information emerges. To manage expectations, parties set clear deadlines, exclusivity periods, and binding provisions for confidentiality and exclusivity within the LOI. These elements protect the process while allowing substantive terms to be refined during due diligence and contract negotiation.
Valuation combines financial performance, market position, and future prospects to determine a fair price. Buyers and sellers often use multiples of earnings or revenue, discounted cash flow analysis, and comparable transactions to arrive at a negotiated value, with terms reflecting contingent payments or earn-outs in some cases. Price adjustments for working capital, debt, and liabilities are commonly settled through closing accounts or holdbacks. Clearly defined adjustment mechanisms and transparent accounting treatments in the purchase agreement reduce post-closing disputes about the final price.
