Wall Street Journal (07/15/13) Neil Shah; Suzanne Kapner
Consumers spent less in June, according to a new government report, purchasing more automobiles but reducing their expenditures on other nonessentials, suggesting the economy has hit a weak patch. Retail sales grew just 0.4% last month, as consumers spent less on restaurant meals and gardening equipment. Excluding volatile auto and gasoline purchases, spending actually fell 0.1%, the first decline in a year.
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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