Associated Press (02/02/12)
U.S. productivity rose 0.7% in the final three months of 2011, according to a preliminary reading by the U.S. Labor Department. Slower productivity growth can be a good sign for hiring if economic growth picks up. Labor costs rose 1.2% in the final three months of last year, as wages and salaries grew at a faster pace than productivity. Still, inflation-adjusted wages fell 1.2% in all of 2011, the steepest annual drop since 1989.
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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