What provisions are most troublesome in SMB sale and purchase agreements?

professional profile

August 22, 2024

by a professional from University of Southern California - Marshall School of Business in North Palm Beach, FL, USA

While negotiating the deal?

During and after the transition of ownership?

(For the sellers, buyers, brokers, etc.)




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Reply by a professional
from University of Virginia in Holmes, NY 12531, USA
While I wouldn't rank it first on any list, I think that, in the context of, how little time folks often care to spend on it vis-a-vis the potential consequences, after-the-fact for a buyer, a badly negotiated seller indemnity is just an absolutely brutal thing (tbc, no competently-advised buyer should ever be *surprised* ex post by the indemnity provision negotiated).
commentor profile
Reply by a professional
from University of Southern California in North Palm Beach, FL, USA
This week I have been working with somebody who bought a wonderful appearing business, but during the transition of ownership has discovered that the seller was not exactly reporting reality, Worse, the legal documents, which the buyer's attorney prepared, did not adequately protect the buyer. And before that the accountants during due diligence did not do enough to detect reality. So, the buyer is struggling to do the right things while the bank is carefully watching the buyer's personal guarantee. (This is the third such case like this I've been asked to review this month.)
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