BLOG: COVID-19 and Material Adverse Effect Provisions in Acquisition Agreements

The coronavirus (COVID-19) continues to create extensive uncertainty for individuals and businesses. For parties actively pursuing an M&A transaction, COVID-19 presents the buyer and seller with additional risks both pre- and post-closing, including impacting the valuation of the target company, increasing exposure to liabilities relating to performance and payment obligations, expanding risk of claims from employees and other personnel, among other extraordinary risks that may result in delay or, in the worst cases, termination of the transaction. Traditionally, acquisition agreements include . . . Read More

BLOG: Purchase Agreement Components, Part 1: Options for Forms of Purchase Price Consideration in Acquisition Agreements

Whenever parties enter into negotiations to buy and sell a target company, one of the first points of discussion is the purchase price. In particular, the purchase price discussion often reflects the amount of cash that will be paid by the buyer to the seller at closing, and, in fact, nearly all acquisitions involve cash as all or part of the purchase price consideration. However, a cash payment at closing is not the only type of consideration that is common . . . Read More

BLOG: COVID-19 and Its Effects on Credit Facilities

With the spread of COVID-19, businesses all over the world have seen their operations affected and their cash flow and production decreased, putting them at risk for potential default on their credit obligations. The prediction is that the global economy will enter into a recession, which will continue to affect the financial situation of millions of businesses. All businesses should consider the available options to remedy any borrowing deficits in light of specific circumstances. When providing financing for business enterprises . . . Read More

BLOG: Important Considerations When Structuring M&A Transactions for Government Contractors: Pre-Transaction Part 1 of a 3-Part Series

M&A transactions involving government contractors carry several regulatory and industry-specific considerations that can materially impact all aspects of the deal—from high-level structuring considerations to risk allocation for compliance issues to additional administrative checklist items. If neglected or overlooked, they can result in major headaches. This three-part series outlines certain key issues to consider before, during, and after transactions involving government contractors. Pre-Transaction: Novation The Anti-Assignment Act (41 U.S.C. § 6305) generally prohibits companies from selling government contracts. However, the Federal . . . Read More

BLOG: New York v. Delaware Part 2: Which State is Best for Governing Law?

In Part 2 of this blog series (visit this link for Part 1), we dive into which state—New York or Delaware—is best for businesses to consider as governing law for their contracts. Both Delaware and New York have a reputation for being the governing law or jurisdiction of choice in commercial agreements and corporate transactions. A company’s decision will greatly impact which rules and laws govern agreements when legal issues arise. Where Should I Go for Governing Law? Both Delaware and New . . . Read More

BLOG: New York v. Delaware Part 1: Which State Is Best to Incorporate My Business?

Business owners often have two questions when launching their business and growing it through commercial relationships and/or corporate transactions. These questions are “where should I incorporate?”, and once the business is incorporated and operating, “what should the applicable law be of our agreements?” Two states come to mind when dealing with these questions. Both Delaware and New York have developed a reputation for purposes of incorporating businesses and being the governing law/jurisdiction of choice in commercial agreements and corporate transactions. . . . Read More

BLOG: Healthcare Company Investments and Acquisitions

In recent years, acquisitions of and investments in healthcare companies have been on the rise, particularly driven by increasing private equity investment activity. These investments can provide unique opportunities for healthcare companies to grow and for investors to realize the benefits of the expanding healthcare industry. While these acquisitions and investments often look and feel like standard acquisitions and investments, the highly regulated nature of the healthcare industry imposes additional risks and requirements on any investor in these companies. This . . . Read More

BLOG: Government Contractor Acquisitions and Clearances: Deal Structure Matters

Our Corporate and Government Contracts attorneys often counsel contractors interested in acquiring an entity with a clearance or assets used on a classified contract. The clearance is a consideration in the transaction that cannot be overlooked. Indeed, the clearance is often one of the seller’s most important “assets.” Buyers and sellers alike should be aware of the National Industrial Security Program Operating Manual (“NISPOM”) requirements. For instance, if the acquisition is a stock purchase and the buyer holds the acquired firm as a subsidiary, the NISPOM states that, . . . Read More

BLOG: Special Considerations When Forming a Medical Professional Services Company

While it is often thought that forming a business is a simple process accomplished by filing formation documents provided by a jurisdiction’s Secretary of State (or equivalent), actual compliance with a particular jurisdiction’s corporate and/or limited liability company law provisions requires further analysis. For many types of professional services businesses, most states require such professional services businesses to organize as professional corporations (“PCs”) or professional limited liability companies (“PLLCs”), which impose additional organizational requirements. Professional services businesses are often categorized . . . Read More

BLOG: Why Government Contractors Should Know About the Delaware LLC Division Statute

Relatively often in the government contracting industry a business finds itself in the position where, for one reason or another, it needs to split, fracture, or otherwise reorganize its operations by separating one line of business or division into a separate entity. When prime federal contracts are transferred from one entity to another, it often necessitates a novation agreement with the contracting government agency.  Many government contractors discover the novation process to be relatively lengthy and burdensome, with the potential . . . Read More