Legal Blog

M & A Nuggets: Avoid Hairline Fractures

businessA hairline fracture is a fracture of the bone caused by stress.  It can result from trauma, is painful and can slow down your activity.  In the purchase of a business, it is important to avoid hairline fractures along the way.  Hairline fractures can be caused by a lack of communication between the purchaser and the seller, by a delay in contacting third-parties whose consent is required and by professionals who put their desire to win at any cost above their client’s interest.  First, it is crucial for the purchaser and seller to fully understand each other’s objectives in the transaction, and to then come to an agreement on all major business terms.  Second, major third-parties whose consent is required, including landlords and lenders, must be contacted well before the planned closing date.  These third-parties, who have their own processes and procedures to go through when faced with a client sale, often take a long time to react.  Last, you should clearly explain your objectives and expectations to your counsel.  You should feel comfortable that you are working with counsel who will put the goal of making the deal happen, ahead of winning every point in the negotiation.  The lesson here is that with proper communication and planning, you can avoid hairline fractures in your deal. manuggets subscribe2


Glenn D. Solomon Esq., is a principal at the law firm of Offit Kurman and has provided counsel to businesses and business owners for more than twenty-five years, with extensive experience in the purchase and sale of businesses, structuring ownership agreements, and advising companies in financial distress


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