Sale of Assets

News & Analysis as of

Why this may be the time to buy or sell a hotel management company A hot trend and five key issues

One of the hottest trends right now is buying (or selling) independent hotel management companies. The demand is coming from all directions – existing management companies, investment funds and foreign buyers. Existing...more

France: A Court of Appeals Decision Provides Helpful Guidance Regarding an Employer’s Obligations When Consulting with Employee...

Before agreeing and executing a business sale involving a transfer of a business, an international publishing company (Wolters Kluwer) consulted its works council. The works council refused to deliver its opinion and issued...more

New York ALJ Rejects Retroactive Application of Statute

State courts generally have allowed legislatures a fair amount of flexibility in adopting retroactive statutes, but a recent New York case held that, under the circumstances presented, the retroactive application of a statute...more

Is Your Baby Your Buyer’s Collateral?

Even before dealing with the intricacies of nondisclosure agreements, employment offer letters, stock restriction agreements, and incentive plans, it is not unusual for founders to have already dreamt of an IPO or sale event....more

Is there a Serious Threat to a Secured Creditor's Right to Credit Bid at Bankruptcy Sales, or Is the Impact of Recent Cases...

The right to credit bid is one of the most important protections afforded a secured creditor. Recognized under both state and bankruptcy law, the right to credit bid safeguards against undervaluation at an asset sale, whether...more

Sharpening the Blue Pencil: NC Court of Appeals Allows Buyer and Seller to Authorize Trial Court Reformation of Non-Competes...

With its split decision in Beverage Systems of the Carolinas, LLC v. Associated Beverage Repair, LLC, et al. (No. COA14-185), the North Carolina Court of Appeals has created a new question about the universal application of...more

Personal Goodwill Of Employee Reduces Estate Tax Value Of Corporate Stock

The question of “personal goodwill” often comes up in sales of corporate assets. When a business is sold, the shareholder will often seek to sell his or her “personal goodwill” in the business separately from the...more

Selling Your Business: Acing Due Diligence

You put your company up for sale, potential buyers are lining up. What then follows is the inevitable: The due diligence process, in which the buyer kicks your tires before going ahead with the purchase. In the many, many...more

Goodwill Owned by a Shareholder Can Provide Tax Planning Opportunities

A recent U.S. Tax Court case reminds us that the personal goodwill owned by the principal shareholder/employee can provide significant tax planning opportunities. Generally, the sale of assets by a "regular" corporation...more

For Love or Charity – A Charitable Bailout Using Charitable Remainder Trusts for the Sale of a C Corporation

I have personally observed in my professional travels that many taxpayers are reluctant charitable donors. However, we you remind a business owner that they only have three choices when it comes to taxes (1) Pay yourself;...more

Dent v. Ramtron Int’l Corp., C.A. No. 7950-VCP (Del. Ch. June 30, 2014) (Parsons, V.C.)

In this memorandum opinion, the Court of Chancery granted the defendant’s motion to dismiss the plaintiff’s claims that defendants breached their fiduciary duties in connection with the sale of the defendant-corporation to a...more

Texas Supreme Court Denies Minority Shareholder’s Oppression Claims

On June 20, the Texas Supreme Court ruled that courts are not authorized to order closely held corporations to buy out a minority shareholder’s interests under state law, and that no common-law cause of action exists for...more

Business Litigation Alert: Texas Supreme Court Update - New Ruling Restrains Minority Shareholder Oppression Claims

The Texas Supreme Court recently issued its decision in Ritchie v. Rupe, a case that essentially eliminates the continuing viability of claims for minority shareholder oppression in Texas. The case involved a dispute over a...more

Letter of Intent: Gateway to a Deal

Your time is valuable. So is the business that you are thinking about selling or the business you intend to acquire. You may also be thinking that before running up professional advisor costs, your business folks should...more

In re Interstate General Media Holdings, LLC, C.A. No. 9221-VCP (Del. Ch. Apr. 25, 2014) (Parsons, V.C.)

In this memorandum opinion regarding the judicial dissolution of a Delaware LLC, the Court of Chancery, ordered the sale of the company in a private, English-style auction, as opposed to a public auction, in order to maximize...more

Delaware District Court Affirms Order Approving Gifting In Chapter 11 Case

The U.S. District Court for the District of Delaware has affirmed a bankruptcy court order which approved both a sale of the debtors’ assets and the establishment of an escrow account, which essentially provides a “gift” to...more

Potpourri Of Issues In Foremost Building Bankruptcy Sale

In In re Scimeca Foundation Inc., 497 B.R. 783 (Bankr. E.D. Pa. 2013), a Chapter 7 trustee sought court approval for a sale of the debtor’s property and resolution of related issues over the objections of the debtor. In...more

Third Circuit Concludes Personal Injury Causes of Action Against a Successor to Debtor’s Business are Generalized Claims

In a novel decision, the United States Court of Appeals for the Third Circuit held, in its ruling In re Emoral, Inc., 740 F.3d 875 (3d Cir. 2014), that personal injury claims of individuals allegedly harmed by a bankrupt...more

What Right Does an Estate Trustee Have To Sell Real Estate?

Taking on the role of estate trustee can involve many challenges, both legally and otherwise. Being an estate trustee where the deceased assets include real estate can carry with it additional challenges which must be...more

Meandering Through Minutiae – How The Type of Consideration Can Determine The Need For Shareholder Approval

Section 1001 of the California Corporations authorizes a corporation to sell all or substantially all of its assets when the principal terms are approved by the board of directors and the outstanding shares (unless the...more

U.S. Tax Court Ruling in State Conservation Tax Credit Case Requires Income Recognition

In its recently issued opinion in the case of Route 231, LLC v. Commissioner, T.C. Memo 2014-30 (2/24/14), the United States Tax Court (the “Court”) held that a transfer of state tax credits to a 1% member who had contributed...more

Company Selling Assets Must Include Employees on Military Leave in List of Employees Available for Hire

The Uniformed Services Employment and Reemployment Rights Act (USERRA) provides broad protections to employees called for active military service. Last month, the Eighth Circuit Court of Appeals found that these protections...more

What Happens To A Covenant Not To Compete Upon The Sale Of A Business?

Be careful with covenants not to compete when you buy or sell a business. That's the lesson from Amerigas Propane, LP v. Coffey, 2014 NCBC 4, decided this week by Judge Jolly....more

Tax Litigation Update: Second Circuit Tweaks its Standard of Review in Tax Cases Involving Mixed Questions of Law and Fact;...

On November 14, 2013, the United States Court of Appeals for the Second Circuit clarified the standard of review for mixed questions of law and fact in a case on review from the Tax Court. The case, Diebold Foundation, Inc....more

More On Asset Sales And The Attorney-Client Privilege

Last week, I dipped a toe into the difficult topic of what happens to the attorney-client privilege in merger and acquisition transactions. In that post, I framed a definitional question – is the attorney-client privilege an...more

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