M&A Disputes: How They Happen, How to Resolve Them, How to Avoid Them

M&A Disputes is an indispensable pragmatic guide providing an exhaustive discussion of the ‘mechanics’ of M&A transactions. M&A disputes – which range from breach of warranty and fraud claims to disagreements over price adjustment, earn-outs and material adverse change and many others – are more common than many participants in M&A transactions may realise. They can take years to resolve and cost many millions of pounds, euros, or dollars. A dispute can adversely affect the post-transaction environment and hence the prospects of a successful acquisition or, at worst, frustrate a deal entirely. It is, therefore, crucial to understand how such disputes happen, how they can be resolved, and how to avoid them, or at least minimise the potential for an M&A dispute. This vital book is also a deeply informed analysis of what goes wrong in deals that leads to disputes and how to avoid (or resolve) such eventualities.

What’s in this book:

Originally intended as a second edition of the author’s well-known M&A Disputes and Completion Mechanisms, published in 2018, this is in fact a new book, drawing on a new set of experiences and observations taken from a period where the scope for M&A disputes has intensified. Framed as an in-depth discussion of typical questions that confront those who assess financial and accounting issues in M&A disputes, including the question of damages, the analysis expertly investigates the pitfalls that can arise in such components of the process as the following:

• the completion mechanism, including the rationale and basis of measurement of individual purchase price adjustments and the locked box
• the role of accounting information in presenting, or misrepresenting, the underlying economic reality of a business and in informing a valuation
• valuation principles, standards of value, and valuation methods used for M&A disputes
• valuation matters specific to M&A disputes, including the question of value vs. price and relevant counterfactuals
• material adverse change clauses, and
• ‘red flags’ for fraud

A concluding chapter distils ‘lessons learned’ into a short, practical commentary drawing on the author’s extensive experience of M&A and related disputes, with recommendations that plot a clear path to avoidance of disputes.

How this will help you:

With its sound understanding of the completion mechanism – including the rationale and basis of measurement of individual purchase price adjustments, the locked box, and how to identify fraud – this practical and up-to-date guide, grounded in corporate finance theory as a starting point of the analysis, will be a valuable resource to all those who work on M&A transactions, whether as principal, adviser, insurer, funder, independent expert, judge, or arbitrator.