Protecting a Buyer from Hidden Liabilities and Tax Risks in M&A
[Case Overview] A client planning to acquire a large food distribution company in New Jersey was ready to proceed based solely on the seller’s provided financial statements. Recognizing the risks, Song Law Firm’s Commercial Law team advised a rigorous Due Diligence process.
[Legal Strategy] Our team cross-referenced the seller’s tax returns with state debt records from the past five years. We discovered substantial unpaid New Jersey Sales Tax and undisclosed liabilities to previous suppliers. We negotiated a significant reduction in the purchase price and drafted a “Holdback” provision in the Asset Purchase Agreement (APA), ensuring the seller remained liable for any past debts discovered post-closing.
[Result] The client successfully reduced the acquisition price by approximately $250,000 and finalized the deal with comprehensive legal protection against future claims.
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KakaoTalk: Song Law Firm
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Phone: 201-461-0031
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Email: mail@songlawfirm.com
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Website: www.songlawfirm.com
Disclaimer: This case study is for informational purposes only. Results depend on the facts of each case. This does not constitute legal advice.
