Tag archives: Representations and Warranties

Representations and Warranties Insurance and COVID-19 Considerations

By Jamie Parker on September 29, 2020 Posted in M&A

The use of representations and warranties insurance (RWI) has grown dramatically in recent years as buyers (and to a lesser extent, sellers) have increasingly relied on RWI to allocate risks and provide other benefits in M&A transactions. The COVID-19 pandemic and its economic impacts have led to significant uncertainty for buyers, as well as for … Continue reading

Ripples of #MeToo in the M&A world: examining the “Weinstein Clause”

By Jaray Zhao (Toronto) on October 25, 2018 Posted in M&A

A recent report Bloomberg indicates the increasing relevance of buyers staying away from a “#MeToo company” in M&A transactions – i.e., a company facing sexual misconduct allegations. This does not suggest that buyers are staying away. Instead, buyers are developing novel ways of addressing the risk brought upon by a “#MeToo company.” The first method … Continue reading

Liability caps around the world: a global comparison

By Troy Ungerman (Toronto) on May 24, 2018 Posted in M&A

It is common around the world for representations and warranties in private M&A transactions to survive for an agreed upon period of time after closing. During this survival period, the seller is faced with the risk that the purchaser may bring an action against it for breach of a representation or warranty. There are a … Continue reading

Why have a document retention policy?

By Troy Ungerman (Toronto) on February 8, 2018 Posted in M&A, Uncategorized

The current digital age has made it easier for companies to retain an enormous volume of documents – significantly more than a company could have afforded to keep before the advent of electronic record-keeping. In response, companies have sought to upgrade their IT systems to digitize their paper records and to allow for increased storage. … Continue reading

IP representations and warranties in tech M&A

By Troy Ungerman (Toronto) on September 28, 2017 Posted in Intellectual property, M&A

When negotiating an M&A deal involving a technology company, parties need to pay particular importance to the representations and warranties regarding the target company’s intellectual property (IP). In a recent Forbes article, “18 Key Issues in Negotiating Merger and Acquisition Agreements for Technology Companies”, Richard Harroch addressed some of the standard issues that come with every … Continue reading

Picking it up for a song: deal considerations when purchasing a distressed business

By Alexander Schmitt (Toronto) on May 30, 2017 Posted in Finance, M&A

Although a growing body of evidence—from job numbers to stock price figures—suggests that the Canadian economy is set for strong growth this year, there will always be companies (and industries) that get left behind for one reason or another. Where those companies that cannot meet their obligations have otherwise attractive assets, it presents an opportunity … Continue reading

2016: the year of sandbagging

By Troy Ungerman (Toronto) on January 17, 2017 Posted in M&A

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

By Carole Gilbert (Montreal) on June 1, 2016 Posted in Corporate finance

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

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

By Matthew Lippa (Toronto) on April 2, 2015 Posted in Corporate finance

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