Business Insider (06/25/12)
Economic data released during the week ended June 22 showed some improvement from the prior week’s reports, with housing permits hitting a more than three-year high, contributing to a jump in the index of Leading Economic Indicators to 0.3. The Philladelphia Fed Index dropped to -16.6, which is an improvement over the -30 reading seen nine months ago. Moreover, the ASA Staffing Index, which leveled off during the past two months, climbed to 93 for June.
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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