Any best practice sharing on a Stock sale?

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March 29, 2026

by a searcher from University of Pennsylvania - The Wharton School in Philadelphia, PA, USA

Hi All, We are working on a deal that is better to keep the company's license and safety record etc., to avoid higher insurance premium, meaning a stock sale. We plan to do 338(h)(10) election. Any best practice sharing for a stock sale? Thank you!
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Reply by a professional
from Harvard University in Lynbrook, NY 11563, USA
You have to be much more careful with liabilities in a stock sale and negotiate for much stronger indemnities with strong backup (e.g., a large seller note with clear offset rights, or escrows/holdbacks if appropriate and workable). If there are particular liabilities of concern, then even if you agree to indemnity caps in general, those should be carved out of the caps. (Taxes can often be an important issue as many owners use their companies as a piggy bank and have real tax exposure which you can inherit.)
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Reply by a searcher
from Cornell University in Philadelphia, PA, USA
No best practices sharing but I am in a similar situation now. Under LOI on a deal and I think we will end up going stock vs. asset for similar reasons. Happy to connect and discuss further. In Philly as well
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