Wall Street Journal (08/05/14) Kathleen Madigan
The Institute for Supply Management’s nonmanufacturing index for July rose to 58.7 from 56.0 in June, the highest level since January 2008. Forecasters surveyed by the Wall Street Journal had forecast a reading of 56.5. A reading above 50 indicates growth. The construction industry played a large part in the increase, and the only sector that saw a decrease in business activity was utilities. Meanwhile, the employment index rose to 56.0 from 54.4.
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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