Wall Street Journal (02/02/15) Ben Leubsdorf
U.S. factory activity hit its lowest level in a year during January, although the sector is slowly continuing to expand, according to the Institute for Supply Management. The ISM’s overall index declined to a seasonally adjusted 53.5 in January from 55.1 in December. A reading above 50 signals expansion. The decline was broad-based, with the employment, new order, production, and supplier delivery gauges all falling from December.
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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