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After the deal to sell the seller’s shares in the target company (“Target”) has completed and all signed documents relating to the deal have been dated (“Completion Documents”) the legal advisors to the seller and the buyer are required to document and deal with post-completion obligations on behalf of their respective clients which are set out under the share purchase agreement (“SPA”) or are required to under company law. What happens to the Completion Documents? As most deals complete over the phone,...

Completion is a term used for when the sale completes and the shares and/or assets of the target officially pass from the seller to the buyer. A target date is usually set, and your legal team will work hard to ensure that target date is met. The run up to completion of a transaction can be a very busy time for your legal team as they aim to ensure all transaction documents are agreed and all pre-completion requirements are completed by...

What's the purpose of disclosure? During the sale of shares in a company (“Target”), the buyer will require the seller to respond to a range of due diligence enquiries about the Target’s business so that any risks which may be inherited post-completion are revealed. Although the seller’s responses and supporting documentation to due diligence enquiries provide information to the buyer enabling the buyer to better understand what it is buying, the process of disclosure is the seller’s opportunity to reduce its liability...

What is an indemnity? Once the transaction completes, who bears the burden if an unexpected liability arises? The seller will want to walk away from the sale with minimal future liabilities relating to the business. The buyer will want assurance that any losses which arose under the control of (or were caused by) the previous owners will be compensated for by the seller. How is an indemnity different from a warranty? A warranty is a contractual statement made by the seller regarding the...

As mentioned in our most recent article a share purchase agreement (“SPA”) will contain a list of statements that provide the buyer of shares in a target company (the “Target”) with certain assurances that the Target is in good health. These “warranties” provide the buyer with protection in the event that any of those statements prove to be untrue and cause the business to suffer a loss post-sale as the buyer may be entitled to bring a claim against the...

Glenville Walker and Partners are delighted to announce that Laura Harrild, Senior Associate of the real estate team, has been appointed as a Partner at the firm. Laura Harrild deals with all aspects of commercial property including investment, property management, landlord and tenant, development, property finance and refinance (including development finance) and business purchases and sales, and has experience of both sides of each (buyer and seller, lender and borrower, landlord and tenant), so can anticipate what the other side are...

Your Share Purchase Agreement will contain a (likely) long list of statements which aim to give certain assurances to the buyer that your business is in good health. These statements are known as the “warranties”. Warranties provide the buyer with some form of protection in the event that any of those statements prove to be untrue and cause the business to suffer a loss post-sale. Under those circumstances, the buyer may be entitled to bring a breach of warranty claim...

What is a Share Purchase Agreement? A share purchase agreement or “SPA” is the main contract by which a seller sells the shares they own in a company known as the “target” to a buyer for a specified price. What is in an SPA? If heads of terms were agreed the SPA usually reflects those terms and additional rights and obligations that the buyer and seller each are required to observe in relation to the deal. Regardless as to whether there are heads...

Your Heads of Terms are signed, and the main terms of the deal are now agreed in principle “subject to due diligence”. What does this mean exactly? Before committing to a purchase, a buyer will want to see exactly what it is they are buying. Similar to a residential property purchase, a potential buyer will want to have a look around, ask any questions of the seller and arrange for a valuation before signing on the dotted line. The same applies...