Wall Street Journal (11/02/12) Josh Mitchell
The Institute for Supply Management’s factory order index rose slightly from 51.5 in September to 51.7 in October. A measure of new orders rose two percentage points to 54.2, an indication that demand is increasing and factories will likely need to increase production in the coming months. Despite the expansion of orders, manufacturers remain cautious about hiring and face an ongoing downturn in exports.
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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