M&A Talk (Mergers & Acquisitions), by Morgan & Westfield cover image

M&A Talk (Mergers & Acquisitions), by Morgan & Westfield

Expert Advice on Avoiding Disputes Post-Closing

May 1, 2024
Bill Wiersema, M&A expert, shares valuable advice on avoiding post-closing disputes in M&A deals. Topics include common areas of dispute, the importance of expert advisors, working capital adjustments, earnouts, due diligence, and the role of financial experts in preventing conflicts.
01:07:50

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

  • Deals should define debt and working capital clearly to avoid post-closing disputes.
  • Clear guidelines in purchase agreements are crucial to prevent working capital disagreements.

Deep dives

Working Capital Disputes and Debt-like Items

Deals closing often lead to potential disputes, especially concerning the definition of debt and working capital. Businesses are typically sold as cash-free and debt-free, requiring sellers to pay off debts while retaining cash proceeds. Disagreements may arise regarding defining debt-free transactions, leading to contentious issues around bank debts and other financial obligations. Working capital disputes are common due to differences in pre and post-closing calculations, such as receivables, inventory, and payables, impacting post-sale funding and viability.

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