How do pre-deal reps and warranties help prevent losses?

Описание: Representations and warranties should be negotiated ahead of a deal closing in order to make clear to all parties what the true state of the business is supposed to be, says Craig Frame, a Partner at law firm Mayer Brown who has worked extensively on lower-middle-market and Entrepreneur-Through-Acquisition (ETA) investments.

The reps and warranties in the purchase agreement set forth a series of facts the seller claims to be true, such as details about the business' contracts or litigation status. All these statements of fact form what Frame calls "a complete box." If a troubling fact emerge post-closing, "it will be quite clear whether or not that thing was inside the box or outside the box," says Frame.

Follow Search Party on LinkedIn:   / search-party-channel  

Search Party Lead Sponsor:
Next Coast Legacy https://lnkd.in/eSAuRW5p

Search Party Sponsors:
Avidbank https://www.avidbank.com/
Boulay - Contact Boulay's Search Fund Team: https://lnkd.in/eFF88SVf
Mayer Brown https://lnkd.in/gU7sPPSg
Oberle Risk Strategies https://oberle-risk.com/
Plexus Capital https://plexuscap.com/

Search Party video-podcast website: https://lnkd.in/efJEa6GV

#legal #law #deals #lawyer #privateequity