In this episode, Partner Neil Millar interviews Aaron Lloyd, a Partner in our Litigation and Dispute Resolution division on buyer remorse in M&A deals. They delve into the complexities of post-acquisition disputes and the strategies that businesses can use to protect themselves. They highlight the importance of clarity in sale agreements, common pitfalls, the significance of acting swiftly on claims, and the role of holdbacks, escrow, and guarantees in managing risk.
[00:49] Neil and Aaron note the significant rise in M&A disputes exploring how economic shifts have contributed to this trend, particularly with buyers feeling they’ve overpaid. They talk about buyer’s remorse and strategic litigation, how parties often use litigation as a tool when deals turn sour.
[04:28] Aaron outlines the common types of claims, including breach of warranty and misleading conduct, and discusses how economic changes are driving value-based disputes where buyers feel the deal no longer aligns with original expectations.
[05:29] Aaron stresses the importance of going beyond data room disclosures and conducting a thorough review with a disclosure letter to avoid post-deal surprises.
[14:17] Neil and Aaron discuss the importance of providing careful and measured responses to RFIs to avoid creating unintended warranties that could lead to future legal issues.
[16:30] They talk about the importance for buyers to act swiftly on any post-acquisition suspicions or issues, ensuring they don’t miss deadlines for making claims, particularly around warranties.
[18:11] They outline the importance of escrow, holdbacks, and guarantees in protecting buyers from potential warranty claims and ensuring there's accessible money if a claim is necessary.
[00:20:10] Finally, Aaron emphasises the need for clarity in price adjustment mechanisms to avoid disputes.
Information in this episode is accurate as at the date of recording Tuesday, 24 September 2024.
Please contact Neil Millar, Aaron Lloyd or our Corporate or Litigation team if you need legal advice and guidance on any of the topics discussed in the episode.
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