Wall Street Journal (04/10/12) Eric Morath
Higher energy prices are pressuring small businesses, and many
plan to begin charging more for goods and services. The National
Federation of Independent Business small-business optimism index
declined to 92.5 for March from 94.3 in February. But a separate
report from the U.S. Department of Labor found the number of job
openings across the country at the end of February—3.5
million—was unchanged from January.
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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