Purchase agreements often make payments contingent on post-closing performance, and these “earn-out” provisions serve a valuable purpose by allowing buyers and sellers to share in the risks and rewards of future performance, providing the buyer comfort regarding the accuracy of representations regarding the business, and keeping the seller committed to the success of the enterprise. The high stakes involved in many earn-outs, buyer disappointment where hoped-for performance does not materialize, and frequent use of ambiguous contractual language, however, make earn-out disputes a regular occurrence.
We use a collaborative approach that emphasizes close consultation with our clients and contingent payment arrangements to share risk. We believe our effectiveness is enhanced by our partners’ transactional M&A experience and our focus on the representation of plaintiffs in complex commercial and shareholder litigation.
To discuss an earn-out dispute, please contact Ethan Wohl at 212 758 4097 or ewohl [at] wohlfruchter [dot] com.