Hans Lundsten Co-Authored the article “Mistakes Buyers Make – Reduced Indemnification Recoveries Due to Asserted Tax Savings,” which appears in the May and June editions of the American Bar Association’s Business Law Today.
It is fairly common in the sale of any business for the seller to make various representations to the buyer and for the seller to agree to be obligated to the buyer if any representation is breached. It is also fairly common for the seller to request that its obligation to compensate the buyer for such a breach be reduced to the extent the buyer gets a tax benefit as a result of the breach. This article examines whether there is any legal basis for the seller to make this type of request and the problems a buyer can face if it agrees to this request.
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