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Corporate acquisition disputes

Regrettably we deal with a lot of disputes arising from corporate acquisitions, many of which would have been avoidable if litigators had been involved at the outset to advise on the risks (and remedies) around company sales and purchases. 

Disputes that arise after the purchase of a business  mainly centre on the accounts; and/or profit forecasts.  Representations that have been given in regard to an acquisition and the disclosure that has or has not been given are also frequent causes of disputes.

"... grounded, nuanced, realistic and yet focused on the best possible outcome for me is how I would describe the guidance offered by the team."

K Volak

litigation funding

Funding

Some litigants apply for litigation funding to pay their legal costs because without it they would not be able to afford to pursue an action at all. But this is not the only situation in which litigants seek to use litigation funding.

Businesses no longer need to invest and risk their own capital to fund a legal claim.  FISCUS is the funding package that we can offer clients to help manage the financial risk of litigation and move those costs off your balance sheet. 

Find out more about litigation funding options available to you.

The importance of contracts

Corporate acquisition disputes and complaints by new business owners arising from unclear or undisclosed contracts; unforeseen or undisclosed liabilities; misunderstood or misrepresented contracts; or a straightforward deceit or fraud on the part of the seller can often be resolved in timely and cost-efficient ways. 

These are disputes that often lend themselves to arbitration. Arbitration confers a number of advantages not least confidentiality and the ability to set timetables for resolutions.  Parties are often encouraged down the  arbitration route due to the introduction of arbitration clauses into sale and purchase agreements.

These disputes are complex so, to generate a good result, it is essential to consult a lawyer with the right level of expertise,   Regardless of whether they are acting for a Claimant or Defendant the lawyer must truly understand the commercial nexus behind a transaction; the commercial considerations that went into different decisions that were made and the dynamics of the transaction. This includes understanding  the extent and nature of liabilities, risks or obstacles to recoveries; as well as the best way to achieve recoveries.

Often deferred consideration provisions or other protections have not been agreed within sale and purchase agreements; or their provisions are inadequate or unsuitable.  We can assess the most cost-effective way to resolve these disputes and deliver a fair outcome to the parties. 

Partnerships

The changes to partnerships over time can lead to further disputes. Even where partnership agreements have been entered into, and a written contract exists. If formalities and agreements are not followed, the departure of one partner or the joining of a new partner can lead to disputes. Individuals believe they have a partnership governed by a written contract; when in fact they have only what is an unplanned partnership at will and a worthless piece of paper.  

A "partnership at will" is a partnership that can be terminated by any partner outside of the terms of the agreement. This means that the survival of the partnership and its ongoing work could be at risk.

Disputes between the partners can, therefore, arise commonly when new partners have joined, and formalities have been overlooked. Still, the consequences of those potentially small disputes can be enormous for the future of the partnership.

The scope of a partnership can also broaden and change over time across a range of businesses far beyond, what was intended when they were initially set up. The development of limited liability partnerships has led to a new range of disputes.

That, in turn, can often lead to disputes between partners when individuals wish to take businesses in different directions; or when, for example, succession planning becomes a significant issue. Our expertise covers dealing with a wide variety of partnerships across a wide range of sectors and a wide variety of industries.

A partnership has to be carried out to make a profit; however, profit does not necessarily have to be made. Charitable and not-for-profit concerns cannot constitute partnerships as they cannot have the intention to make a profit. However, there are few if any restrictions of the scope of businesses, industries and sectors a partnership can cover.

Recent experience

Our recent experience in dealing with matters such as this include: 

  • Acting in respect of a £82 million share options dispute arising out of corporate acquisition documents;
  • Acting in regard to a dispute concerning a PLC and its share purchase terms;
  • Acting for a business seller in regard to claims brought alleging non-disclosure of material account and irregularities.

Our specialist team understand the nature of these disputes; the underlying business issues and can deliver a successful resolution for you.

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