Section 1060 Allocation in Asset Sales — The Buyer’s Tax Cap and the Seller’s Character Benefit Are in Tension
The Section 1060 allocation looks like a tax-form chore. It decides how much of the purchase price is taxed at capital-gain rates versus ordinary rates.
The Working Capital Adjustment Is the Most Common Post-Closing Dispute — Why the Target Number Matters More Than the True-Up
Founders fixate on the working-capital true-up. The fight that actually moves money is the target number and the accounting principles, locked in at signing.
The § 220 Books-and-Records Demand Has Become a Deal-Blocking Tool — Why a Single Minority Stockholder Can Slow Your Sale to a Crawl
Section 220 has become the plaintiffs’ bar’s most reliable pre-closing weapon. Boards should anticipate the demand before the announcement.
The “Knowledge” Rep in Founder Sale Agreements — Whose Heads Are Inside the Box, and How Wide Is the Box
To the Company’s knowledge means whatever the agreement says it means. The 2024-2025 Chancery cases on knowledge qualifiers reward careful drafting.
The “Indebtedness” Definition in the Purchase Agreement Pulls More Out of the Wire Than Founders Plan For
The buyer wires the headline price minus indebtedness. What counts is contractually defined and routinely includes items founders never priced. What to fix at the LOI.
The Ordinary Course Covenant Between Signing and Closing Is the Easiest Way for Sellers to Breach — Without Knowing They Did
The interim operating covenant looks like boilerplate. Recent Chancery cases have made it the cleanest path for buyers to walk before closing.
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