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Credits

Product ID: 406879EAU
 

Seller's Representations and Warranties in a Business Sale

OnDemand Webinar (88 minutes)

Learn business selling fundamentals relating to representations and warranties and how to facilitate negotiation in a business sale.Ready to sell your or your client's business? Most business owners and their advisors focus on setting a sale price and finding a buyer, and then assume they are ready to close the deal. But they may have overlooked a major part of selling a business: reaching agreement with the buyer on representations and warranties. This topic will help business owners and their advisors know what to expect in the way of representations and warranties that a buyer will require in a sale agreement. The information will teach you what representations and warranties are typical, which ones are currently the focus of many buyers, and which representations and warranties can be dangerous to sellers by carrying a risk of liability. Learn when to sell a business as is, how to negotiate reasonable representations and warranties, how to control potential liability related to breach of representations and warranties, and when to negotiate insurance coverage for that potential liability. The information will also cover companion clauses that relate to representations and warranties, and explain how those clauses can limit or expand a seller's liability. Learn what steps to take prior to the sale to facilitate the negotiation and closing process.

Authors

Erich W. Merrill Jr., Miller Nash Graham & Dunn LLP

Agenda

Representations and Warranties Typically Required by Buyers

• The Function of Representations and Warranties in Sale Agreements

• Subjects Typically Covered by Representations and Warranties in Sale Agreements

• What Representations and Warranties Buyers Really Focus on

• Representations and Warranties That Most Often Lead to Liability or Claims

Negotiation of Representations and Warranties

• When to Sell a Business As Is

• The Central Role of Knowledge and How to Define It

• Covering the Appropriate Time Period Before Sale

• Insurance Coverage for Related Liabilities, as a Term of the Sale Transaction

• Setting the Stage for Negotiation: Addressing Representations and Warranties in the Letter of Intent

Companion Clauses That Define a Seller's Liability for Representations and Warranties

• Indemnification

• Survival Periods and Fundamental Representations and Warranties

• Sandbagging: What the Buyer Knows Can Hurt You

• Disclosure Schedules: Describing and Completing Them to Minimize Liability

Making the Sale Easy: Advance Steps to Be Able to Make and Support Reasonable Representations and Warranties

• Recordkeeping

• Corporate Formalities

• Allocation of Time and Resources to Prepare for the Sale

• Working With Experienced Investment Bankers, Accountants, and Counsel