We are looking at a couple of subtrade construction firms and it seems a stock sale makes more sense than an asset sale to maintain continuity with current employees and contracts.

In a stock sale, is it standard that the seller receives all the outstanding AR once the company collects it? In theory, the seller has paid for the AP associated with the outstanding AR and wants to be compensated for it. How is this typically handled?

If the seller is obligated to the outstanding AR and construction firms typically have contracts in progress at closing, how does a buyer protect themselves from taking over projects that have been possibly overbilled? If progress billing has been frontloaded and the seller receives all the outstanding AR, the buyer could find themselves short of funds to pay for project costs and/or short of anticipated margin.

Thank you for your suggestions and insight in advance.