With the recent resurgence in mergers and acquisitions activity, Bass, Berry & Sims attorneys Tatjana Paterno and Margaret Dodson authored an article for Mergers & Acquisitions highlighting seven indemnification provisions that buyers should consider.
Among the issues Tatjana and Margaret highlighted for dealmakers to think about is a focus on thorough pre-closing diligence and post-closing performance. They also highlighted the importance of robust indemnification provisions in acquisition agreements to address potential post-closing issues effectively.
The authors' key recommendations included understanding notice requirements, managing expectations around representation and warranty insurance (RWI), incorporating fee-shifting provisions, and considering alternative dispute resolution mechanisms to mitigate litigation costs. Buyers are advised to ensure their indemnification provisions cover first-party claims adequately and protect against fraud or fundamental representation breaches, especially in regulated industries.
"Buyers who incorporate these considerations into their indemnification provisions should be in a better position if—and when—post-closing issues arise," emphasized Tatjana and Margaret.
The full article, "7 Indemnification Provision Considerations Buyers Need to Know," was originally published by Mergers & Acquisitions in the May/June issue. On July 1, the content became available online. To view the full article, you may click here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
