Associated Press (02/08/13) Martin Crutsinger
The U.S. Department of Labor reports that worker productivity fell 2% in the fourth quarter, following a 3.2% gain in the third quarter, but rose 1% for all of 2012, versus a 0.7% increase in 2011. Labor costs edged up 4.5% in the fourth quarter and 0.7% for the year. Economists expect weak productivity through this year, noting that as the economy picks up steam and demand rises, companies will have to boost hiring to keep up.
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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