Dow Jones Business News (10/03/14) Cynthia Lin
The Institute for Supply Management’s nonmanufacturing purchasing managers index dropped to 58.6 in September from 59.6 the previous month, which was the highest reading since the revised survey was launched in January 2008. Economists surveyed by the Wall Street Journal had forecast a reading of 58.5. The business activity and production index fell to 62.9 from 65.0 in August, and the employment subindex increased to 58.5 from 57.1.
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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