Bloomberg (12/27/13) Derek Wallbank; Roger Runningen
President Obama has signed into law a bipartisan federal budget worth $1.01 trillion, which eases $63 billion in spending cuts for the next two years. The budget also is expected to reduce the federal government’s deficit by $23 billion over 10 years. While the budget establishes spending priorities, lawmakers still must negotiate how the money is spent by various agencies.
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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