Wall Street Journal (12/17/15) Jon Hilsenrath; Ben Leubsdorf
The U.S. Federal Reserve yesterday announced it will increase interest rates. Fed officials plan to increase the benchmark federal-funds rate from near zero to between 0.25% and 0.5%, and will adjust their strategy as they see how the economy performs. New projections show officials expect the fed-funds rate to climb to 1.375% by the end of 2016, to 2.375% by the end of 2017, and to 3.25% in three years.
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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