Reuters (02/28/14) Lucia Mutikani
U.S. gross domestic product expanded at a 2.4% annual pace in the fourth quarter of 2013, revised downward from the 3.2% pace reported a month earlier, according to the U.S. Department of Commerce. Economists surveyed by Reuters had forecast a revision to 2.5%. Weaker than expected November and December consumer spending accounted for a large portion of the revision.
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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