Behind the Money When M&A goes wrong
13 snips
Apr 24, 2024 A private equity firm's acquisition of a California grocery store chain goes awry, potentially costing the owners millions. The podcast explores the complexities and legal disputes that arise from M&A deals, highlighting the importance of contract clarity and alignment of goals between buyers and sellers to avoid costly disputes.
AI Snips
Chapters
Transcript
Episode notes
Unexpected Legal Battle Post-Deal
- When Kingswood Capital Management bought Save Mart, a California grocery chain, it led to unexpected legal battles.
- The deal closed normally, but a $109 million dispute emerged afterward, shocking the selling family.
Post-Closing Adjustments Can Backfire
- Private company deals often include post-closing adjustments that can lead to disputes.
- These disagreements are usually minor, but here involved an unprecedented $109 million issue.
Contract Interpretation Sparks Huge Dispute
- Kingswood asserted that any subsidiary debt needed to be paid by the seller according to the contract.
- This interpretation led to a $109 million claim despite it possibly being double counting.