M&A Science Managing Risks and Liabilities in M&A with Tina Kassangana
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Apr 24, 2025 Tina Kassangana, a corporate and M&A lawyer at Moritt Hock & Hamroff LLP, shares her expert insights on managing legal risks in mergers and acquisitions. She breaks down the critical phases of M&A, emphasizing the importance of reps and warranties clauses. Tina discusses strategies for aligning buyer-seller expectations, highlights the complexities of multi-agreement deals, and offers practical advice on preventing post-close disputes. Her real-world experience brings clarity to the often daunting legal landscape of dealmaking.
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Three Key M&A Risk Stages
- Legal risks arise mainly in three M&A stages: pre-sell valuation, mid-deal diligence, and post-closing disputes.
- Mitigation involves clear agreements, especially regarding earnouts and seller financing terms.
Negotiate Earnouts and Escrow Early
- Negotiate earnout metrics early, defining revenue or profitability clearly with agreed accounting policies.
- Use escrow to hold about 10% of upfront consideration as risk assurance.
LOI Should Be Binding Yet Flexible
- Include key points like acquisition type, employment of key personnel, and major obligations in the LOI.
- LOI should be binding on critical terms yet flexible for diligence discoveries.