New York Times (01/22/14) Eduardo Porter
The full tally of the financial markets’ collapse in 2008-09 is still a mystery, though economists with the Federal Reserve Bank of Dallas estimate that the financial crisis cost each American nearly $20,000. The broader impact on workers’ well being, however, could raise the cost of the crisis to about $120,000 per person in the U.S.
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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