Legal Blog

M & A Nuggets: Indemnification – Let’s Get Specific No. 3

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The most recent nuggets discussed the “what” and “how much” issues on indemnification clauses.  Another issue that arises on indemnities is the “when”, that is, how long the seller should indemnify the purchaser.  Also known as a survival period, the seller and purchaser should negotiate the length of time that the purchaser will have to make an indemnity claim against the seller.  The purchaser wants enough time to allow claims to surface.  The seller, on the other hand, wants a limit on the time because the seller does not want to be exposed in perpetuity.  On indemnifications for many kinds of representations and warranties, the parties usually agree to a fixed amount of time for the purchaser to bring a claim, whether one year, two years or otherwise.  The time for a purchaser to bring some kinds of claims should be tied into the period of time that a third-party with a claim would have to sue, that is, the applicable statute of limitations.  There are usually some claims, which relate to representations and warranties that, if incorrect, could have a catastrophic effect on the purchaser, that have no time limits.

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ABOUT GLENN D. SOLOMON

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 businessesstructuring ownership agreements, and advising companies in financial distress

 

 

 

 

ABOUT OFFIT KURMAN

Offit Kurman is one of the fastest-growing, full-service law firms in the Mid-Atlantic region. With 120 attorneys offering a comprehensive range of services in virtually every legal category, the firm is well positioned to meet the needs of dynamic businesses and the people who own and operate them. Our eight offices serve individual and corporate clients in the Maryland, Delaware, New Jersey, and Northern Virginia markets, as well as the Washington DC, Baltimore, Philadelphia, and New York City metropolitan areas. At Offit Kurman, we are our clients’ most trusted legal advisors, professionals who help maximize and protect business value and personal wealth. In every interaction, we consistently maintain our clients’ confidence by remaining focused on furthering their objectives and achieving their goals in an efficient manner. Trust, knowledge, confidence—in a partner, that’s perfect.

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