M&A Observations From a Shareholder Representative

Für im auch US-Merger & Acquisition Geschäft tätige Berater oder Unternehmen interessanter Artikel: “Observations From a Shareholder Rep.” by Paul Koenig, Shareholder Representative Services LLC, featured in American Bar Association / Mergers and Acquisitions Committee — Spring 2012 Issue of Deal Points.

Observations From a Shareholder Rep By Paul Koenig

SRS is engaged on a high volume of M&A transactions. We tend to be brought in on deals that have long or complicated post-closing processes or when the stakes are high with earnouts or escrows. On small, simpler deals, the parties may look for a volunteer representative or a lower-cost service provider. Based on our experience, attorneys frequently want to know what we see and which issues create problems. We have, or will be, discussing many of these issues at the recent ABA M&A committee meetings at Laguna Beach and in Las Vegas, but below is a summary of some of our findings.


Discussions about sandbagging tend to get a lot of airtime at legal conferences, but the reality is that in our experience, this issue hardly ever comes up in discussions regarding the resolution of indemnification claims. There are a few possible explanations for this. First, we rarely see anti-sandbagging language included in agreements, so it would be unusual that this would be a defense to a claim. Second, most disclosure schedules are pretty exhaustive, so the number of facts that would fall within the coverage of a sandbagging provision (known to the buyer but not explicitly included in the disclosure schedule) is pretty low. Third, even where the contract is silent on sandbagging, discussions regarding what the buyer knew or did not know tend not to be the most powerful arguments. Rather, the discussions typically focus on the technical analysis of what are the facts and whether a representation or warranty has been breached ...

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