Rep & Warranty Insurance Doesn't Guarantee Purchase Price

Law360, New York (December 7, 2015, 10:38 AM EST) -- The purchase of buyer side representation and warranty insurance has become increasingly an integrated part of U.S. merger and acquisition transactions. Purchase of the product permits sellers to escrow less of the sale proceeds and immediately distribute more to their equity holders. It generally limits the maximum indemnification exposure of the seller (in today's market, to one half of one percent of the purchase price, or less), except in the event of fraud. Some insureds come to the product thinking that, among other things, they have purchased a guarantee of the price, measured as a multiple of trailing 12 month earnings before interest, taxes, depreciation and amortization (EBITDA), as set forth in the most recent income statements of the purchased business....

Law360 is on it, so you are, too.

A Law360 subscription puts you at the center of fast-moving legal issues, trends and developments so you can act with speed and confidence. Over 200 articles are published daily across more than 60 topics, industries, practice areas and jurisdictions.

A Law360 subscription includes features such as

  • Daily newsletters
  • Expert analysis
  • Mobile app
  • Advanced search
  • Judge information
  • Real-time alerts
  • 450K+ searchable archived articles

And more!

Experience Law360 today with a free 7-day trial.

Start Free Trial

Already a subscriber? Click here to login

Related Sections

Law Firms

Hello! I'm Law360's automated support bot.

How can I help you today?

For example, you can type:
  • I forgot my password
  • I took a free trial but didn't get a verification email
  • How do I sign up for a newsletter?
Ask a question!