Reuters (03/31/14)
The pace of business activity in the U.S. Midwest declined in March to its lowest level since August, according to the Institute for Supply Management. The ISM’s most recent Chicago business barometer stands at 55.9, down from 59.8 in February. Economists surveyed by Reuters had forecast a reading of 59.0. Despite the decline in the Chicago gauge, the domestic manufacturing sector continues to grow at a moderate pace, experts say.
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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