In M&A, the headline purchase price is rarely what the seller takes home. Working capital true-ups, seller notes, and earnouts can significantly change what the seller actually receives and, if not carefully negotiated and drafted, can lead to post-closing disputes. This program follows one hypothetical acquisition of a business through three common fights: an inventory true-up that comes up short, a buyer who stops paying the seller note, and an earnout the seller says the buyer sabotaged. For each dispute, we hear the buyer’s argument and the seller’s argument, then cover the drafting and negotiation points that would have prevented the fight.

This CLE program is designed for attorneys on both the buy-side and the sell-side of the deal. Newer lawyers will learn how each mechanism works through a concrete example. Experienced deal lawyers will leave with practical drafting fixes they can use in their next M&A transaction.

• Draft working capital adjustment provisions, including definitions, count procedures and dispute resolution, that reduce post-closing disagreements
• Negotiate seller note terms, including setoff rights, security and default provisions, from either the buyer’s or seller’s side
• Structure an earnout with clear metrics, operating covenants and audit rights that lower the risk of litigation