Tag Archives: indemnification

Healthcare M&A Corner – The Escrow Holdback: Another Buyer Security Blanket

In my last post, I discussed the dynamics behind materiality scrapes with respect to purchase agreement representations and warranties, and indemnification provisions.  Another tool utilized by buyer and seller parties to an M&A deal that affects allocation of risk is a concept known as the escrow holdback, normally effectuated through a separate escrow agreement.  While sellers want the entirety of their sale proceeds yesterday, that mindset is not always practical considering the parties’ negotiating positions and resulting leverage.
Continue reading Healthcare M&A Corner – The Escrow Holdback: Another Buyer Security Blanket

Healthcare M&A Corner – The Materiality Scrape: Buyers Rejoice; Sellers Beware

In counseling clients on M&A deals, it is critical to stress transaction nuances that may otherwise serve as an afterthought to a buyer or seller.  While both parties reliably demonstrate laser focus on the big picture (i.e., the deal economics), there remain several purchase agreement provisions that can significantly affect a client’s allocation of risk, including representations and warranties, and indemnification provisions. Continue reading Healthcare M&A Corner – The Materiality Scrape: Buyers Rejoice; Sellers Beware

Contractual Indemnification – DANGER

By Patricia S. Hofstra

Indemnity provisions are used to shift risk from one party to another. The intent of an indemnification provision in an agreement is to impose on one party the responsibility to pay the liability, damages, costs, expenses, and attorney fees for the other party to the agreement, under the circumstances set forth in the agreement.  An indemnification clause obligates one party to compensate the other party for losses or damages. This compensation is separate and apart from other contractual obligations and damages.  Continue reading Contractual Indemnification – DANGER