Wall Street Journal Online (02/06/12)
A recent poll of 87 start-up chief executives by ExpertCEO indicates that 80.4% anticipate revenue increases this year, and 47.1% of these respondents think revenue will rise by more than 20%. The survey also shows that 55.8% of chief executives plan to increase their work forces this year. Only 5.8% expect their work forces to shrink, and 38.4% do not anticipate any work force changes.
Buyers of a business generally expect sellers to be responsible for certain liabilities relating to when the seller owned its business—a concept mergers and acquisitions professionals refer to as indemnification. Indemnification is one of the most heavily negotiated, and potentially most significant, provisions of a purchase agreement, and understanding the terminology common to such agreements is essential when negotiating a deal. Attorney Paul Pincus of Ortoli Rosenstadt LLP explains what sellers are liable for, how a seller’s liability may be limited, and how buyers may seek to fund potential indemnity claims.
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