Mergers and acquisitions of businesses, developed and undeveloped real estate, and other business transactions, including long-term contracts calling for a series of continuing performances over a lengthy period of time, give rise to potential risks of future changes in circumstances of the parties or the property with which they are dealing, of previous matters (undisclosed or unknown at the time of the transaction) giving rise to potential liability arising subsequent to the date of the transaction or the inception of the agreement (which may or may not give rise to indemnity obligations), and of claims arising that the parties did not conceive of at the time of the transaction, as well as many other similar problems.
Often, and increasingly, insurance companies are asked to provide coverage for some or all of these kinds of matters. It is important to have counsel experienced in all kinds of business transactions to help evaluate and price the risks which companies are asked to insure and to handle the defense of claims when they arise.
Throughout our firm’s practice, we have negotiated and handled all sorts of business transactions and litigated about those same kinds of issues.
Merger, Acquisition, and Other Transactions Work Examples
A sampling of the types of merger, acquisition and other transactions we are experienced in are as follows:
Handled (negotiated, wrote and policed) over fifty (50) business sales or acquisitions (and numerous other negotiations that did not result in sales or purchases), both stock and asset acquisitions, in U.S., Canada and Spain, of varying sizes from under $50,000 to in excess of $5M including, for example:
- Represented seller of newspaper and printing company in multi-million-dollar sale of facilities;
- Represented insurance agency in acquisitions of five (5) other insurance agencies;
- Represented heavy equipment parts and services supplier in acquiring four (4) additional retail/wholesale/service businesses (Arkansas, Florida, South Carolina, Texas) and in additional 6-7 other negotiations for acquisitions or mergers, including acquisition of a manufacturing facility in Spain and acquisition of a multi-million dollar retail/wholesale seller of parts in Canada.
- Represented metal processing company in acquisition of scrap metal dealer;
- Represented metal processing company and parent company in managing and handling long-term legacy liabilities resulting from previous merger, including environmental issues;
- Represented seller in sale of local internet technology business;
- Represented seller in sale of regional environmental services (water and wastewater treatment) business;
- Represented attorneys in dissolution or separation from their law firms;
- Represented borrowers and lenders in major commercial real estate acquisitions, including buildings, shopping centers, apartment complexes and time-share developments, including reviews and opinions concerning legal compliance and document enforceability;
- Sales, acquisitions and reorganizations of assets and businesses in bankruptcy (Chapter 11) and receivership (Fred’s of Hernando (retail store), Washington Furniture (manufacturing facility), Ivy Guest House (hotel), University Inn (hotel), Tupelo Apts. (apartment complex), Wood Manor (apartment complex), Viscount Furniture (manufacturing facility), Greenville auto dealer (represented prospective purchaser), Medart, Inc. (represented prospective purchaser of manufacturing facility);
- Acquisitions of manufacturing facilities; acquisitions of wholesale and retail businesses, including real estate.
Handled (negotiated, wrote and policed) multiple long-term operation and maintenance contracts; long-term supply contracts; and other contracts requiring performances over an extended period.
- Representing lessors and lessees in negotiating long-term business/commercial leases requiring reciprocal and continuing performances over time and the provision for indemnities and dealing with legacy liabilities (including in Mississippi, Georgia, Tennessee, Arkansas, Oklahoma, Nevada and Washington);
- Representing operator in the negotiating and securing long-term operation contracts for municipal water and wastewater treatment facilities and for industrial wastewater treatment facilities (25+) requiring reciprocal and continuing performances over time and the provision for indemnities and dealing with legacy liabilities (in Mississippi, Tennessee, Arkansas, Texas, Florida and Oklahoma);
- Representation of distributor in negotiating and securing long-term supply and requirements contracts from foreign and domestic suppliers of products, primarily in the heavy equipment parts business, and in resolving disputes arising from the performance or not of those agreements, including litigation.
Successfully represented lessee/purchaser of industrial property in negotiations with lessor/seller of property concerning asserted environmental contamination of property during lessee’s predecessor’s occupation and use of property. Involved legacy liabilities of merger between client and predecessor. Risks include claims of post-merger/acquisition and decreases in business value; claims of contingent tax liability; and claims of breaches of warranty and good faith dealing in transactions.
Litigation Work Examples
Litigation resulting from business sales or acquisitions or long-term contracts and the like have been numerous in our practice. Examples are:
- Breach of Warranty of Sales and Issues of Misrepresentation: Plaintiff alleged that a final, binding contract for the purchase of the Defendant Shareholders’ stock was entered into between himself and the Shareholders and that the Shareholders breached that agreement by failing to tender their stock, by failing to enter into the “final definitive agreement” tendered by Plaintiff and/or by failing to negotiate the final definitive agreement in good faith. The agreed purchase price was $11,000,000+, and Plaintiff sued for damages of approximately $35,000,000.00. Result: Obtained summary judgment for Defendant Shareholders in the District Court, affirmed by the Court of Appeals, establishing that letters of intent signed by Defendant Shareholders with Plaintiff were not “final definitive agreements” and that parties intended not to be bound until “final definitive agreement” was executed and that Defendant Shareholders did not negotiate in bad faith. The decision in this case was a major development in the law of negotiations and binding contracts in Mississippi.
- Successfully represented acquirer of trademark and servicemark rights from Chapter 11 debtor in response to legacy liability claims of other purchaser of intellectual property rights who claimed that rights acquired by client/acquirer infringed intellectual property rights of other purchaser. Claim made a year after acquisitions of trademarks/servicemarks and resulted in exoneration of trademark/servicemark purchaser and recovery of further claim held against Chapter 11 debtor.
- Currently representing former business owner in fraudulent conveyance action in U.S. Bankruptcy Court for the Northern District in Mississippi wherein the trustee has charged that the buyout of the former owner was actually or constructively fraudulent as to creditors. The amount in issue exceeds $5,000,000.
- In the course of performance of a multi-year supply contract supplier sought to terminate contract, collect indebtedness and cripple business of distributor. Full-line supplier of heavy equipment parts to U.S. distributor terminated long-term supply contract and demanded all sums owed by distributor. Issues involved the interpretation of the parties’ long-term agreement and their performances thereunder and whether contract was breached (and by whom) and the consequences. We established that contract was wrongfully terminated by supplier, that distributor was entitled to damages incurred as the result of wrongful termination of the supply contract in excess of $600,000, that amounts demanded by supplier from distributor were far in excess of amounts actually owed, and that offset could be applied, which succeeded in preserving distributor’s business and viability.
- Represented owner of shopping center in regard to attempt by anchor tenant to terminate long-term lease due to mold and repair issues. Established that problems arose from anchor tenant’s previous subtenant, that owner was not responsible for issues and that there was applicable insurance coverage to resolve the major problems. Case was settled to the substantial benefit of owner without final adjudication.
- Represented Defendant seller of a retail business against the purchaser who alleged fraud in the inducement of the sale. Established that the defendant seller had committed no fraud and that the plaintiff purchasers had done insufficient due diligence and investigation and had misled themselves and prevailed on a jury verdict in favor of Defendant seller and on post-trial motions. Purchaser alleged significant decrease in value after sale, but it was determined that any value decrease was perceived by Purchaser and not substantiated by facts.
- Handled innumerable debt and foreclosure actions, primarily on behalf of lenders/creditors, including extensive bankruptcy court representation of virtually every kind of possible party in bankruptcy proceedings (debtors, lenders, secured and unsecured claimants, purchasers of assets, trustees, new lenders and contractors, etc.), as well as the initiation of receiverships, involuntary bankruptcy proceedings and the representation of receivers.
Representative clients include: Kinwood, LLC, Heavyquip, Crawler Parts, Bryson & Company, as well as other clients whose names cannot be disclosed due to client confidentiality.