Purchase Price

News & Analysis as of

Delaware Chancery Court Concludes Indemnification and Other Provisions of a Merger Agreement Are Not Enforceable Against...

In November, the Delaware Court of Chancery issued a decision that raises troubling questions about commonly used techniques in private company acquisitions and that, if not modified on appeal or through legislation, could...more

Private Company M&A: Post-Closing Purchase Price Adjustment Provisions: New Decision Holds Some Common Mechanics Unenforceable

In private company acquisitions, it is common for the buyer to require that a portion of the merger consideration be set aside in escrow as an accessible source of funds to cover the buyer’s post-closing indemnification...more

Delaware Court Provides Guidance on Acceptable Deal Protection Mechanisms and Scope of Third Party Aiding and Abetting Liability...

On November 25, 2014, the Delaware Court of Chancery issued a decision in In Re Comverge, Inc. Shareholders Litigation, which: (1) dismissed claims that the Comverge board of directors conducted a flawed sales process and...more

Delaware Court Invalidates Release and Indemnification Obligations Against a Selling Stockholder in a Merger Transaction

The Delaware Chancery Court recently invalidated a buyer’s attempt to obtain a release and indemnification obligations from selling stockholders of a Delaware corporation that was acquired in a merger. The ruling will require...more

Delaware Supreme Court Reverses Lower Court And Affirms Arbitrator’s Award

Reversing the Court of Chancery’s ruling vacating an arbitration award, the Delaware Supreme Court held in SPX Corporation v. Garda USA, Inc. that the arbitrator’s decision should have been affirmed because the arbitrator’s...more

In re TPC Group Inc. S'holders Litig., C.A. No. 7865-VCN (Del. Ch. Oct. 29, 2014) (Noble, V.C.)

In this letter opinion, the Court of Chancery denied plaintiffs’ application for an award of attorneys’ fees and held that plaintiffs’ class action litigation was not the cause of the increase in the merger price achieved...more

Jeff Bell Video Law Bulletin: Unusual Purchase Price Methodologies in M&A Transactions [Video]

Morrison & Foerster Partner Jeff Bell discusses unusual purchase price methodologies in M&A transactions....more

Purchase Price Allocations Under ASC 805: A Guide to Allocating Purchase Price for Business Combinations

When your company is on the buy-side of an acquisition, you are burdened with the responsibility of reporting all items related to the transaction on your financial statements. Large companies under high levels of scrutiny...more

OECD/BEPS Intangibles Revisions to Change Character, Treatment of Goodwill

Corporations acquiring intangible assets as part of business combination will no longer be able ignore goodwill in their subsequent restructurings and asset transfers. That’s the upshot from tax authorities from around the...more

Deconstructing a Letter of Intent for Business Owners, Part 1

I recently appeared on an episode of the Private Equity FunCast: “The Art (and Science?) of the LOI” to talk deal terms with private equity masters Devin Mathews and Jim Milbery. This well-spent hour got me thinking about...more

District Court Grants Preliminary Approval of Settlement in Merger Case

The US District Court for the Western District of Pennsylvania recently granted preliminary approval to settle a merger suit in which Michael Baker Corp. (Baker) shareholders alleged that the $397 million purchase price that...more

Overstock Under Scrutiny: Does This Recent Decision Represent a New Wave of California Litigation for Sellers of Consumer Products...

It is not often that a decision from a California trial court receives or deserves as much attention as the recent tentative decision issued by Alameda County Superior Court Judge Wynne Carvill in the State’s case against...more

PA Tax Law News -- December 2013

In This Issue: Fuel Taxes Increased to Solve Transportation Funding Shortfall; PA Supreme Court Upholds Rejection of Township Business Privilege Tax; Unclaimed Property - Challenge to Delaware’s Auditing Procedures;...more

PA Sales Tax Ruling Clarifies Computation of Taxable Purchase Price for Tractor Trailers

The Pennsylvania Department of Revenue has ruled that the Federal excise tax imposed by Section 4051 of the Internal Revenue Code on certain commercial vehicles is not to be included in the taxable purchase price for sales...more

Assessments, Condos vs. Town Homes  [Video]

Chicago Tribune Condo Adviser columnist Howard Dakoff explains why there's not always a one size fits all formula for calculating town home assessments. Howard is a partner in the Community Associations Practice Group of...more

Caveat Venditor: Is Your Buyer Laundering Money?

The Rise of the Cash Market - We have previously dedicated several posts to the emerging trend among South Florida developers of financing new condominium projects by requiring purchasers to deposit 70-80% of a unit’s...more

Will Usual and Customary Price be the Next False Claims Act Battleground?

Recently, a federal judge held that a qui tam relator’s allegations that a pharmacy routinely reported falsely inflated “usual and customary” prices for generic medications in claims submitted to federally funded health care...more

Auto Parts Distributor Avoids Liability In Robinson-Patman Suit

On July 19, 2013, the Ninth Circuit affirmed an award of summary judgment to an aftermarket auto parts distributor that had received better prices than a competitor. Gorlick Distribution Centers, LLC v. Car Sound Exhaust...more

Ooops! Changed My Mind! Need Faster Depreciation!

A Federal Court of Appeals has recently upheld a decision of the U.S. Tax Court that a buyer of business assets cannot unilaterally change the purchase price allocated to those assets in order to secure quicker depreciation...more

China Government Questions 60 Firms Over Drug Prices

The National Development and Reform Commission (NDRC) (the PRC government regulator responsible for price setting) announced in early July an investigation against 60 pharmaceutical companies for their drug pricing...more

Summary of the Implementing Regulations for Japan’s Feed-In Tariff Law for Renewable Electric Energy

This updates our September 13, 2011 Client Alert entitled “Outline of Japan’s Feed-In Tariff Law for Renewable Electric Energy,” which summarized “The Act on Special Measures Concerning the Procurement of Renewable Electric...more

Price Advertisements Matter: Ninth Circuit Finds False Sale Prices Give Plaintiffs UCL Standing

Following the California Supreme Court’s lead in Kwikset that “labels matter,” the Ninth Circuit Court of Appeals recently held that “price advertisements matter.” In Hinojos v. Kohl’s, the Ninth Circuit reversed the...more

Yahoo's $30 Million May Be 'Underpay' for Summly's D'Aloisio [Video]

May 7 (Bloomberg) -- Gregory Gale, partner at Squire Sanders LLP, talks with Bloomberg Law's Spencer Mazyck about his representation of 17-year-old British programming whiz Nick D'Aloisio in the recent sale of his mobile...more

Buying and Selling Businesses in Today's Economy, Stephen Opler  [Video]

Now is a great time to sell a business. Nearly 4,800 private equity firms are looking to invest $1 trillion in business acquisitions, and the loan market is returning to re-recession levels. ...more

Purchase Price Adjustments: How True is Your True-Up?

A substantial majority of acquisitions involving private targets include uncapped post-closing purchase price adjustments, or "true ups," tied to the target's balance sheet. Since a target's value typically is assessed based...more

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