Tag archives: indemnification

AIG reports increased R&W insurance claims in the M&A market

AIG, in its recently published 2017 M&A Claims Report, explored the rising number of representations and warranties (R&W) claims in the M&A market by examining AIG policies written between 2011 and 2015. Increase in R&W claims Mary Duffy, AIG’s global head of M&A insurance, posits that the marked increase in claims could stem from buyers … Continue reading

2016: the year of sandbagging

One of the highlights from the American Bar Association’s (ABA) 2016 Canadian Private Target M&A Deal Points Study in which our firm was a key participant (the 2016 Study), was the increased inclusion of sandbagging provisions in deals. The 2016 Study saw the inclusion of sandbagging provisions in 46% of deals (up from 29% in … Continue reading

Protecting buyers in M&A transactions: trends in the use of indemnification provisions

Allocating liability between buyers and sellers for the business and operating risks of a target company in M&A transactions is key to assessing what might be an appropriate purchase price for the transaction. As a result, the indemnification provisions in a purchase agreement are heavily negotiated with buyers seeking to limit their post-closing damages and … Continue reading

Houlihan Lokey publishes Purchase Agreement Study: key indemnification findings

Houlihan Lokey (HL) recently published its annual Purchase Agreement Study for the 2014 calendar year (the Study). The Study is focused on middle-market change-of-control transactions in which HL served as the financial advisor to either the buyer or the seller, and undertakes a review select terms of the purchase agreements for such transactions. The scope … Continue reading

Make it someone else’s problem: allocating risk in M&A transactions through insurance

During the course of an M&A transaction, it is often the case that the most hotly negotiated aspects of a purchase agreement are the representations and warranties and related indemnities. This is not surprising as these are the key devices used to address allocation of risk as between the parties, and by extension, price. While … Continue reading

Limiting vendor liability in private M&A transactions

In a perfect world, all issues as between a purchaser and a vendor of a business (whether assets or shares) are settled at the time of closing. Unfortunately, this is not how the real world operates, notwithstanding the level of due diligence conducted by a purchaser and its professional advisors. To protect against go-forward liability, … Continue reading

ABA publishes 2014 Canadian Private Target M&A Deal Points Study: key findings (Part II)

Last week, we posted an article summarizing the key findings in the American Bar Association’s (ABA) recently published 2014 Canadian Private Target M&A Deal Points Study regarding financial provisions and pervasive qualifiers. As previously noted, the study analyzed 60 acquisition agreements of private targets by public companies, covering transactions that were signed in 2012 and … Continue reading

Trend report on indemnification provisions: what will matter to buyers and sellers in 2014

Indemnification provisions are an essential component of any M&A transaction and, for obvious reasons, buyers and sellers have opposite agendas in drafting the scope and substance of their inclusion in a transaction agreement. Buyers are motivated to protect themselves from post-closing monetary damage, and the type and extent to which they can indemnify themselves is … Continue reading
LexBlog