Associated Press (09/26/14)
The quick recovery of the economy in the second quarter after a harsh winter signals that the growth outlook likely will look bright for the remainder of the year and into 2015. Many economists think the economy currently is growing at about a 3.0% rate for the third quarter. “The American economy is firing on virtually all cylinders and cruising at a decidedly stronger rate than in recent years,” says Sal Guatieri, senior economist at BMO Capital Markets.
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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