The past few weeks have brought additional opinions from the Delaware courts regarding earn-outs – as Vice Chancellor Glasscock notes, a not uncommon occurrence: A recurring scenario in this Court involves disputes between buyers and sellers of entities over earn-out provisions for post-acquisition performance. The incentives peculiar to such agreements, perhaps, make disputes, if not […]
I observed in my prior post that the seller of a business will seldom obtain a commitment from the buyer to operate the purchase business in such a manner as to maximize the amount of post-closing contingent or earn-out payments. There are exceptions, of course – a search of purchase agreements included in SEC filings […]
John Jenkins at the deallawyers.com blog highlights a recent Delaware case* where an asset purchase agreement included a post-closing contingent payment, as well as the following: “Subsequent to the Closing, Purchaser shall have sole discretion with regard to all matters relating to the operation of the Business. Purchaser shall have no express or implied obligation […]
