Associated Press (08/05/14)
Factory orders rose 1.1% in June from May, according to the U.S. Department of Commerce. Factory orders had declined 0.6% from April to May following three months of growth. Orders for commercial aircraft, which rose 8.4%, led the June gains, but orders in less volatile categories such as machinery, computers and electronic products, and iron and steel suggest businesses are anticipating economic expansion. Factory orders have risen 2.5% over the past year.
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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