Wall Street Journal (07/01/13) Brenda Cronin
The Institute for Supply Management’s broad index rose to 50.9 in June from 49 in May. A reading above 50 indicates expansion. New orders, production, and inventories grew. However, the employment index shrank for the first time in almost four years. U.S. manufacturers are outperforming their foreign counterparts, but also are suffering from weak foreign markets. Domestic demand is aiding some U.S. growth.
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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