M&A Disputes: How They Happen, How to Resolve Them, How to Avoid Them | 2023*

M&A Disputes: How They Happen, How to Resolve Them, How to Avoid Them | 2023*

M&A Disputes is an essential and practical guide that offers a comprehensive exploration of the complexities involved in M&A transactions and the disputes that can arise from them. These disputes—ranging from breach of warranty and fraud claims to issues like price adjustments, earn-outs, material adverse changes, and leakage in locked box transactions—are more prevalent than many involved in M&A may realize. They can take years to resolve and cost millions of pounds, euros, or dollars. Such conflicts can significantly impact the post-transaction environment and may even derail a deal altogether. Understanding the causes of these disputes, how to resolve them, and how to minimize their occurrence is critical. This book provides an in-depth analysis of what typically goes wrong in M&A deals, offering strategies for both avoiding and resolving these issues effectively.

What’s in this book:

Initially intended as a second edition of the author’s widely recognized M&A Disputes and Completion Mechanisms (published in 2019), this book has evolved into a new work, informed by fresh experiences and insights from a time when the frequency and scope of M&A disputes have increased. It offers a thorough examination of the key issues faced by those dealing with financial and accounting aspects of M&A disputes, particularly around the determination of damages.

The book delves into common challenges encountered during the M&A process, including:

• The role of accounting information: How it can either accurately or inaccurately reflect the true economic state of a business, influencing its valuation.

• Completion mechanisms: Analyzing how and why individual purchase price adjustments are measured and applied.

• The locked box mechanism: Exploring how this structure is used and potential disputes that may arise.

• The completion accounts process: Understanding the steps involved and the role of expert determination in resolving disagreements.

• Damages valuation principles: The standards of value and valuation methods used in M&A disputes.

• Specific valuation issues in M&A disputes: Addressing the tension between value and price, as well as the selection of counterfactual scenarios.

• Material adverse change clauses: The significance and potential complications of these clauses in M&A deals.

• Earn-out disputes: How disagreements over earn-out provisions often arise and ways to handle them.

• Fraud red flags: Identifying potential signs of fraud in M&A transactions.

The final chapter consolidates the key takeaways, offering a concise, practical commentary. Drawing from the author’s extensive experience, it provides actionable recommendations for avoiding disputes and improving the M&A process.

How this will help:

This book offers a clear and practical understanding of key M&A processes, such as the completion mechanism, the rationale behind purchase price adjustments, the locked box structure, and how to identify fraud. Rooted in corporate finance theory, the guide provides a thorough analysis, making it an invaluable resource for anyone involved in M&A transactions. Whether you're a principal, adviser, insurer, funder, independent expert, judge, or arbitrator, this up-to-date and well-rounded guide will equip you with the knowledge to navigate the complexities of M&A deals and related disputes.

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