Contact:
Rechtsanwalt
Dr. Christoph A. Lindenau
Weißenburgstraße 58
40476 Düsseldorf
tel.: +49 211 43 63 9365
fax: +49 211 24 83 7313
clindenau@lindenaulegal.de
Contact us here
Rechtsanwalt
Dr. Christoph A. Lindenau
Weißenburgstraße 58
40476 Düsseldorf
tel.: +49 211 43 63 9365
fax: +49 211 24 83 7313
clindenau@lindenaulegal.de
Contact us here
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Acquisition of a Business (continued) and Distressed M&A
The first draft of the sales and purchase agreement usually is presented by the buyer. The catalogue of representations and warranties often is the main part of such agreement and will be adjusted to the results of the due diligence. Often the most difficult part of the negotiations relate to the extent of representations and warranties, the legal consequences of a breach as well as caps and thresholds. Also purchase price clauses and in particular adjustment mechanisms are always in the focus. If the parties reach an mutual consent on those issues the sales and purchase agreement will be signed and notarised, if necessary ("signing"). The transfer of the ownership in the assets or in the shares is often performed later in a separate step ("closing") since the parties frequently agree on conditions precedent which need to be fulfilled for such purpose (such as cartel clearance).
In some cases the acquisition of an insolvent business might offer strategic chances. However, special rules need to be observed if a transaction is concluded with an insolvency administrator. Full scope due diligence investigations are often not an option due to tight time frames or due to organisational difficulties. The insolvency administrator will hardly be willing to agree on extensive representations and warranties. Moreover, the target often is restructured by the insolvency administrator already in close cooperation with the buyer prior to the transfer of the assets, in particular since the buyer often only wants to take over a reduced staff.
Get legal advice from an expert who has already accompanied a vast number of distressed M&A transactions and make sure that the relaunch does not become a nightmare!
In some cases the acquisition of an insolvent business might offer strategic chances. However, special rules need to be observed if a transaction is concluded with an insolvency administrator. Full scope due diligence investigations are often not an option due to tight time frames or due to organisational difficulties. The insolvency administrator will hardly be willing to agree on extensive representations and warranties. Moreover, the target often is restructured by the insolvency administrator already in close cooperation with the buyer prior to the transfer of the assets, in particular since the buyer often only wants to take over a reduced staff.
Get legal advice from an expert who has already accompanied a vast number of distressed M&A transactions and make sure that the relaunch does not become a nightmare!