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Court Of Chancery Explains The Abry Partners Doctrine

Posted In M&A

EMSI Acquisition Inc. v. Contrarian Funds LLC, C.A. 12648-VCS (May 3, 2017)

Parties to an acquisition often attempt to set limits on what may be recovered in any post-closing dispute between them. This helps the buyer get a lower price in return for the safety the sellers buy with a price concession. Exactly how to do this, however, has proved difficult. The well–known Abry Partners decision sets limits, for example, on what claims may be released in advance, such as a claim for fraud based on deliberate misstatements in a purchase agreement. This decision carefully explains the boundaries of what may be released and how to get the best language to set out the parties’ actual agreement. It is a great guideline to follow.

Tags: M&A