In M&A transactions, the seller makes representations and warranties to the buyer regarding the business being sold, its ownership, assets, operations, and liabilities.  The seller typically indemnifies the buyer from losses incurred post-closing resulting from inaccuracies in those representations and warranties.  This contractual structure is used by the parties to allocate certain known and unknown business risks between the buyer and seller.  However, negotiation of these representations and warranties and the indemnity structure in the acquisition agreement can be a contentious and lengthy process.  Buyers usually prefer broad indemnity from the seller for such post-closing losses, and sellers prefer to give a limited indemnity which is targeted to specific risks identified in the seller’s business.

Representation and warranty insurance (R&W insurance) is often an option which can help buyers and sellers avoid contentious negotiation of risk allocation by shifting some of the risks of an acquisition to an insurer.

R&W insurance provides coverage for indemnification claims a buyer may have for losses resulting from breaches of a seller’s representations and warranties in the acquisition agreement. The use of R&W insurance in M&A transactions has increased in recent years due to efficiencies in the insurance market, including lower premiums, better terms, and lower minimum transaction value.

R&W insurance policies can insure either the buyer or the seller in the transaction. Buy-side policies are the most common form of R&W insurance in private M&A transactions.

The viability of using R&W insurance in an M&A transaction depends largely on the size of the deal.  Due to pricing constraints like premium costs and professional fees and expenses, R&W insurance may be cost prohibitive for deals valued less than $20 million.  However, deals with transaction values between $10 million and $20 million are sometimes insured due to increased demand by buyers and sellers.

R&W insurance can benefit both the buyer and the seller in M&A transactions.

For the Seller, R&W insurance can (1) reduce the seller’s risk of liability for breaches of its representations and warranties by lowering or eliminating the seller’s indemnity obligations; (2) provide the seller with a cleaner exit from the business by reducing or eliminating the amount of proceeds held back by the buyer or placed in escrow; and (3) allow the seller to give the more extensive representations and warranties the buyer will want in the acquisition agreement, without as many “materiality” and “knowledge” qualifiers, leading to a quicker resolution of the form of acquisition agreement and thus an expedited closing.

For the Buyer, R&W insurance can (1) supplement or sometimes replace the indemnification protection provided by the seller by providing additional coverage beyond the liability cap and/or survival period in the acquisition agreement; (2) provide a secure source of recovery for losses resulting from breaches of the seller’s representations and warranties, particularly when recovery from the seller may be difficult; (3) allow the buyer to make a more attractive bid to the seller with no (or limited) escrow or holdback required, since the buyer will rely on the insurance for indemnification protection; and (4) preserve key relationships by mitigating the need for a buyer to pursue claims against sellers who will be working for the buyer post-closing.

The insurer will charge a premium for issuing the policy, generally ranging between 2% and 4% of the coverage amount.  The policy coverage amount is typically a dollar amount equal to 10% of the transaction value.  There will be a deductible amount under the policy that is excluded from coverage (the “retention”), generally set at 1% of the transaction value.  So, if an M&A transaction value is $50 million, the policy coverage amount will be around $5 million, the policy premium will likely be around $100,000 – $200,000, and the retention will likely be around $500,000.

The cost of R&W insurance (including the premium) is often split 50/50 between the seller and the buyer; however, this can vary depending on the leverage of the parties in the negotiation of the acquisition agreement.

R&W insurance policies generally do not cover losses resulting from:  (1) breaches of covenants; (2) purchase price adjustments; (3) contingent claims based on future events; and (4) matters that are known to the insured’s deal team before the inception of the policy (including all matters disclosed on schedules to the acquisition agreement and all matters discovered in due diligence).  Other exclusions will likely apply under the policy, based on the results of the buyer’s and the insurer’s due diligence of the seller’s business.

The insurer will typically conduct its own due diligence of the seller’s business during the underwriting process, focusing on areas or issues that could lead to material liabilities.  This process can add some additional time to close the transaction; however, efficiencies are often realized by repeat relationships between buyers, their advisors, and the insurance underwriters who have worked together on previous transactions and have developed a working understanding of each other’s processes.

Sellers and buyers should consult their advisors (attorneys, investment bank or broker) early in the process of an M&A transaction, preferably as early as in the letter of intent/term sheet stage, to determine if R&W insurance is a viable option for the transaction, as both parties may derive significant benefit from purchasing R&W insurance for the transaction.

On the first day of his second term in office, President Trump issued an Executive Order titled “Unleashing American Energy.” This Order contains several provisions intended to encourage American energy production and remove barriers that “have impeded the development” of energy and natural resources.

The Order states that it is “in the national interest to unleash America’s affordable and reliable energy and natural resources.”[1] Therefore, the policy of the United States will be “to encourage energy exploration and production on Federal lands and waters, including on the Outer Continental Shelf,”[2] ensure that abundant and reliable energy “is readily accessible in every State and territory of the Nation,”[3] ensure “that all regulatory requirements related to energy are grounded in clearly applicable law,”[4] to promote consumer choice,[5] and to ensure that the global effects of a rule, regulation, or action shall, whenever evaluated, be reported separately from its domestic costs and benefits…”[6]

In practice, this Order calls for a substantial deregulation of the energy industry. It expressly calls for eliminating the “electric vehicle mandate”[7] and abolishing regulations on household appliances designed to push consumers toward appliances with lower energy consumption.[8] The thrust of the Order is that American success will be achieved not by limiting our energy consumption, but by producing enough energy to provide for American needs however high they may be or become. Importantly, the Order calls for an immediate review by federal agency heads of “all existing regulations [broadly defined] to identify those agency actions that impose an undue burden on the identification, development, or use of domestic energy resources.”[9] Once such a review is complete, agency heads are directed to implement action plans to suspend, revise, or rescind all regulations identified as unduly burdensome.[10]

The Order also revokes twelve prior Executive Orders related to energy and environmental regulation issued by President Biden, which addressed climate change and environmental justice.[11] The Order also revokes Executive Order 11991 of May 24, 1977,[12] related to the protection and enhancement of environmental quality, and takes direct steps to “expedite and simplify the permitting process”[13] and “prioritize efficiency and certainty over any other objectives…”[14] Additionally, all activities and operations associated with the American Climate Corps, established in September 2023, are shut down,[15] and the Working Group on the Social Cost of Greenhouse Gases is disbanded.[16] The Order directs the Chairman of the Council on Environmental Quality to provide guidance on implementing the National Environmental Policy Act in a way less burdensome to business by simplifying and expediting the permitting process. Any industry projects deemed “essential for the nation’s economy or national security” are to receive expedited action on permits, including emergency approvals granted when appropriate.[17] In all permitted matters, agencies are directed to “adhere to only the relevant legislated requirements for environmental considerations[,] and any considerations beyond these requirements are eliminated.”[18] Thus, agencies have been told to not allow considerations beyond those specified in legislation to serve as a reason for blocking any industrial project related to energy production.

Overall, the Order loosens regulations on the energy industry and emphasizes energy production. The changes ordered will make regulatory compliance less burdensome for both upstream and downstream energy suppliers and is the first step in enacting the President’s vision and energy policy for the United States.


[1] Executive Order, “Unleashing American Energy,” Jan. 20, 2025, §1.

[2] §2(a).

[3] §2(c).

[4] §2(d).

[5] §2(e).

[6] §2(g).

[7] §2(e).

[8] §2(f).

[9] §3(a).

[10] §3(b).

[11] §4(a).

[12] §5.

[13] §5(b).

[14] §5(c).

[15] §4(b).

[16] §6(b).

[17] §5(b) and (d).

[18] §6(a).

This article was originally published by Biz New Orleans.

NEW ORLEANS – Devin Ricci and Mary Love, Intellectual Property Lawyers with Kean Miller LLP, have issued a statement urging businesses and individuals to exercise caution to avoid unauthorized use of NFL-related branding or while streaming game broadcasts to avoid hefty fines or legal action.

Ricci and Love highlighted that the NFL maintains strict control over its intellectual property, including game broadcasts, logos, team names, and slogans. “Many facets of the Big Game are protected by copyright and trademark laws,” Ricci explained. “The NFL actively enforces these rights through measures such as takedown notices, cease-and-desist letters, and lawsuits.”

Businesses planning to stream the game must ensure they have the appropriate licensing. A commercial license is typically required for public screenings in establishments such as bars, restaurants, or event venues. Relying on personal streaming subscriptions for such purposes is a violation of the NFL’s licensing agreements and could lead to significant penalties. Love advised, “Check with your service provider to confirm that your streaming package includes the necessary commercial rights.”

The NFL also owns trademarks on terms like “Super Bowl” and associated branding, which cannot be used for promotional or advertising purposes without explicit permission. “Unauthorized use of NFL trademarks is prohibited at both state and federal levels,” Ricci noted. “Businesses can avoid infringement by opting for general terms like ‘The Big Game’ instead.”

The financial consequences of violations are substantial. Under the Copyright Act, statutory damages range from $750 to $30,000 per work, with potential increases up to $150,000 for willful infringement. Similarly, the Lanham Act allows for damages between $1,000 and $200,000 per counterfeit mark, which can escalate to $2 million for willful violations. Both statutes permit the recovery of attorney’s fees, further increasing the costs of non-compliance.

The lawyers stressed that the NFL is particularly vigilant about protecting its brands during high-profile events like the Super Bowl. For businesses unsure about compliance, consulting legal counsel is strongly recommended. “The costs of obtaining the proper licenses pale in comparison to the potential damages of a legal dispute,” Love said.

Kean Miller LLP’s guidance serves as a reminder of the critical importance of respecting intellectual property rights, particularly as New Orleans gears up for a landmark Super Bowl celebration.

A pair of recent decisions from the US Supreme Court and the Fifth Circuit Court of Appeals signals a trend by the judiciary to closely scrutinize agency rulings where, in the past, courts have traditionally maintained a laissez-faire approach.

In Ohio v. EPA, the Supreme Court ruled that an agency action qualifies as arbitrary or capricious if it is not “reasonable and reasonably explained”.[1] The decision was 5-4, with Justice Gorsuch writing for the majority and Justice Barrett writing the dissent. In the dissent, Justice Barrett explained that the Court did not conclude that the EPA’s actions were substantively unreasonable. Rather, the primary basis for the Court’s decision is the argument that EPA failed to provide a “satisfactory explanation for its action” and a “reasoned response” to comments. Justice Barrett noted that the Court should, as it has most often done in the past, “uphold a decision of less than ideal clarity if the agency’s path may reasonably be discerned.”[2] Thus, under Justice Barrett’s view, a reasonable result can save a poorly-explained decision from an Administrative Procedure Act challenge; Justice Gorsuch and the majority rejected this conclusion.

Likewise, a day prior to the Supreme Court’s ruling in Ohio v. EPA, the Fifth Circuit issued its opinion in National Association of Manufacturers v. SEC and held that the SEC had acted arbitrarily and capriciously in two ways: 1) the agency failed to adequately explain its decision to disregard its prior factual finding; and 2) the agency failed to provide a reasonable explanation regarding the significance of certain risks at issue in the matter.[3] The panel’s criticism focused on the agency’s rationale and its decision-making process, rather than the final resulting rule.

In each of the decisions, the courts cite FCC v. Prometheus Radio Project,[4] which had reformulated the arbitrary and capricious inquiry. In that case the Supreme Court ruled that “[a] court simply ensures that the agency has acted within a zone of reasonableness, and in particular, has reasonably considered the relevant issues and reasonably explained the decision.”[5] Per this language, the agency’s decision-making process, along with its final determination, will be scrutinized by the courts if a rulemaking is challenged.

Thus, it appears the “zone of reasonableness” test has usurped previous iterations of the arbitrary and capricious analysis. Combined with the overturning of Chevron deference also announced by the Court last year,[6] the likely overall effect of this new precedent will be greater scrutiny over agency action and a more restricted scope for permissible agency action.


[1] Ohio v. Env’t Prot. Agency, 603 U.S. 279, 292 (2024) (quoting FCC v. Prometheus Radio Project, 592 U.S. 414, 423 (2021)).

[2] Id. at 311 (Barrett, J., dissenting) (quoting Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)).

[3] Nat’l Ass’n of Manufacturers v. United States Sec. & Exch. Comm’n, 105 F.4th 802, 811 (5th Cir. 2024).

[4] Fed. Commc’ns Comm’n v. Prometheus Radio Project, 592 U.S. 414 (2021).

[5] Id. at 423.

[6] See Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024).

Two days before Christmas, the Louisiana Fifth Circuit Court of Appeal handed down an opinion that should be of note to Louisiana employers. In its opinion, the Court of Appeal held that as a matter of law, an employer can be vicariously liable for damages caused by an employee involved in a motor vehicle accident driving to work if the employee is eligible for a mileage reimbursement. Louisiana employers can be held responsible for their employees’ torts through the concept of “vicarious liability” (known as “respondeat superior” under common law). The concept of vicarious liability is codified in the Louisiana Civil Code at article 2320. For an employer to be held liable for an employee’s tort, (i) there must be an employee-employer relationship between the actor and the purported employer and (ii) the tort must have been committed within the course and scope of the actor’s employment with the employer.

Driving to and from work is generally not considered as being within the course and scope of employment; however, there are exceptions to that rule. In a unanimous December 23, 2024, panel opinion, the Louisiana Fifth Circuit Court of Appeal in Miller v. Shamsnia, 24-100 (La. App. 5th Cir. 12/23/24), ___ So.3d___, 2024WL5196576, held that an employer could be vicariously liable for damages caused by its employee while driving if the employer had a policy of reimbursing its employees for their mileage for travel to a work site, even if the employee did not request the reimbursement and was not paid the mileage. In its opinion, the Miller court expressly recognized that “[g]enerally, an employee going to and coming from work is not in the course and scope of employment.” Miller v. Shamsnia, 24-100 (La. App. 5th Cir. 12/23/24), p. 7, ___So.3d___, ___, 2024WL5196576, *4 (citation omitted). However, the court noted that the general rule is “subject to various exceptions, including situations where an employer has involved himself in the transportation of the employee as an incident to the employment agreement, either through furnishing a vehicle or payment of expenses, or where wages are paid for time spent in traveling.” Id. at p. 8, ___So.3d___, ___, 2024WL5196576, *4 (citations omitted).

In the case before the court, the employee involved in the motor vehicle accident was a neurologist who was driving from the New Orleans area to the Northshore on the Causeway Bridge en route to a hospital visit as part of a weeklong rotation. Deposition testimony reflected the fact that the physicians “were compensated through reimbursement of mileage for use of their personal vehicles [at the Internal Revenue Service’s rate for mileage].” Id. at p. 9, ___So.3d___, ___, 2024WL5196576, *4. Although the employee neither requested the travel reimbursement, nor was he paid any travel reimbursement for the night in question, the court noted that he was “eligible” for the reimbursement. Id. ___So.3d___, ___, 2024WL5196576, *4 (emphasis in original). The court held, “[t]herefore, we find that, under the particular circumstances of this case, the exception to the going and coming rule applies because Tulane offered payment of Dr. Shamsnai’s expenses through travel reimbursement. We further find that Dr. Shamsnai was acting within the course and scope of his employment while traveling to Lakeview Hospital on the night of the accident because Tulane had a policy for providing travel reimbursement to physicians commuting to Lakeview Hospital, and his trip to the hospital was employment related.” Id., ___So.3d___, ___, 2024WL5196576, *4 (emphasis added).

A copy of the Fifth Circuit’s opinion is available at the Fifth Circuit’s website: https://www.fifthcircuit.org/dmzdocs/OI/PO/2024/F8301AAE-4FF9-412B-9F2E-CF3C3714EB91.pdf. Because the parties may seek rehearing before the Fifth Circuit or may seek relief from the Louisiana Supreme Court, the story may not have concluded. Kean Miller will monitor subsequent filings and provide any necessary updates.

A recent 4–3 majority decision [1] from the Louisiana Supreme Court exposes market intermediaries to potential liability for damages caused by products sold by sellers using their platform.  In June 2024, the Louisiana Supreme Court answered two certified questions from the United States District Court for the Western District of Louisiana concerning the liability facing online marketplaces when a product sold on their platform by a third-party causes damage. [2] The Court answered two questions: (1) if an online marketplace operator constitutes a “seller” under the Louisiana Products Liability Act (“LPLA”) and (2) whether an online marketplace operator can be liable under a theory of negligent undertaking. [3]

Plaintiff Archie Pickard (“Pickard”) purchased a battery charger on amazon.com that was sold by a third-party seller identified as “Jisell”.[4] Pickard died when the charger malfunctioned, causing a fire in his home.  Jisell sold the charger on Amazon and, specifically, utilized Amazon’s service known as “Fulfillment by Amazon” in which a seller’s products are sent to a warehouse operated by Amazon for storage and processing.[5]  After receiving a customer’s order, Amazon retrieves the product and delivers it to the buyer.[6]  Importantly, the ownership of products such as the battery charger that are sold through “Fulfillment by Amazon” does not transfer to Amazon, but remains with the seller at all times.[7]

Generally, the LPLA only applies to manufacturers.[8]  However, the LPLA’s scope extends to sellers in two instances: (1) the seller exercises control over a characteristic of the product’s design, construction, or quality; or, (2) the seller operates as a manufacturer’s alter ego in importing and distributing a foreign manufacturer’s product.[9]  The Pickard court found that Amazon was a “seller” as it took “physical custody of the product . . . and controlled the process of the transaction and delivery”.[10]

Turning to the second question, the Court referenced its prior decision in Bujol v. Entergy Services, Inc., applying § 324A of the Restatement of Torts Second as the proper test for determining whether an online marketplace operator is liable for a claim of negligent undertaking.[11]  To assert such a claim, a defendant must assume a duty by an affirmative or positive undertaking.[12]  Upon such a showing, a defendant is liable for a negligent undertaking if one of the following scenarios applies: (1) a change in conditions increased the risk of harm over the level of risk existing prior to the defendant’s involvement; (2) the defendant’s undertaking supplants, not just supplements, another’s duty; or (3) the harm is suffered because of reliance by the plaintiff on the defendant’s undertaking.[13]  Ultimately, the Court referred a determination on whether the facts supported Pickard’s claim for negligent undertaking to the trial court.[14]

Following the Louisiana Supreme Court’s decision in Pickard, marketplace operators should carefully consider their conduct and address whether they are stepping into the shoes of a seller and in turn a manufacturer.  Pickard opens the door for applications of the LPLA to parties, such as marketplace operators, that are not colloquially thought of as product sellers.  But all is not lost on marketplace operators because there are numerous legal tools in the toolbox via La. R.S. § 2800.53(1)(b) and (d) as explained in the Bujol case.  These tools can curtail potential liability and allay some of those fears.


[1] Justice Crain authored the majority opinion with Justices Hughes, Genovese, and McCallum dissenting.

[2] Pickard v. Amazon.com, Inc., 2023-CQ-01596 (6/28/24), 387 So.3d 515.

[3] Id. at 517.

[4] Id. at 518.

[5] Id.

[6] Id.

[7] Id.

[8] La. R.S. 9:2800.52. “This Chapter establishes the exclusive theories of liability for manufacturers for damage caused by their products.”

[9] La. R.S. 9:2800.53(1)(b) and (d). The full text of subsection (d) states “A seller of a product of an alien manufacturer [is a manufacturer] if the seller is in the business of importing or distributing the product for resale and the seller is the alter ego of the alien manufacturer.  The court shall take into consideration the following in determining whether the seller is the alien manufacturer’s alter ego: whether the seller is affiliated with the alien manufacturer by way of common ownership or control; whether the seller assumes or administers product warranty obligations of the alien manufacturer; whether the seller prepares or modifies the product for distribution; or any other relevant evidence.”

[10] 387 So.3d at 523 (citing La. R.S. 9:2800.53(2)).

[11] Id. at 526 (citing Bujol v. Entergy Servs., Inc., 2003-0492 (La. 5/25/04), 922 So.2d 1113); Restatement (Second) of Torts § 324A).

[12] Id. at 525 (citing Bujol, 922 So.2d at 1129).

[13] Id. (citing Bujol, 922 So.2d at 1135, 1136, 1148).

[14] Id. at 526 (citing La. S.Ct. Rule XII, § 8; La. R.S. 72.1A; Wightman v. Ameritas Life Ins. Corp., 22-0364 (La. 10/21/22), 351 So.3d 690, 693).

As a business owner, one of the most important decisions of your business career is the decision to sell your business, and once you make the decision to sell, it can be a long and complicated process. To maximize the value of your business and to minimize obstacles and delays in getting to closing, you should carefully prepare your company for sale and prepare for the challenges which arise in each stage of the sale process.  This article includes suggestions for making those preparations, as well as how to manage the multiple stages of the sale process, all with the aim of achieving a successful closing.

Assemble Your Deal Team

You should assemble a team to manage your sale efforts as early as possible. Your deal team should include:

(1) your company management team of key executives to engage and work with your professional advisors, perform due diligence, and negotiate the transaction documents;

(2) legal counsel to draft and negotiate the transaction documents, coordinate the signing and closing of the transaction, and work with the management team in the due diligence process;

(3) an investment bank, broker, or other financial advisor to identify potential buyers and market the business, value the company, manage the sale process, and prepare the marketing materials and organize the due diligence process; and

(4) accountants (and tax advisor) to assist in preparing your company’s financial statements and financial projections and advise you on your (and your company’s) tax liability related to the transaction.

You should choose legal, financial, and tax advisors who have significant experience with mergers & acquisitions (M&A) transactions.  It is not wise to assume that your company’s general legal counsel and CPA have the expertise necessary to guide you through all of the legal, financial, and tax issues that will arise during the sale process.

Find Your Buyer & Value Your Business

Obviously, finding not only a buyer, but the right buyer, is essential to a successful transaction.  An investment banker, broker, or other financial advisor can assist in identifying potential buyers and marketing your company to maximize the purchase price.  This may include an auction in which multiple potential buyers are invited to bid on your company.  Even if you have already identified a willing and suitable buyer, you should still consider engaging an investment bank or other financial advisor to determine an accurate and realistic value for your company, so that you can negotiate an acceptable purchase price with a buyer.

Your company’s potential buyers will generally come in one of two forms:  (1) “strategic buyers”, which are operating companies which are usually competitors, suppliers, or customers of your company; or (2) “financial buyers”, which are generally private equity firms or venture capital firms looking to purchase your company as an investment.

Each type of buyer has pros and cons, and your financial and legal advisors can help you select a suitable buyer based on your preferences.  For instance, a financial buyer’s offer often includes a requirement that the seller stockholders “roll over” a portion of their existing equity in the target company by exchanging that equity portion for one or more classes of equity in the buyer entity or the buyer’s parent company.  The equity received by the sellers in the rollover can constitute a significant portion of the overall consideration paid to the sellers, which means less cash is paid to the sellers at closing.

Due Diligence & Confidentiality

Before a potential buyer is willing to make an offer to purchase your company, the buyer will want to conduct due diligence of your company in order to gather information and identify issues that are relevant to the acquisition.  Before sharing any of your company’s proprietary or sensitive information, you should require each potential buyer to sign a confidentiality agreement at the outset of discussions to ensure each potential buyer maintains the confidentiality of the negotiations as well as any due diligence information.  You should look to your legal counsel to prepare a proper confidentiality agreement that you can use with each potential buyer.

Also, you should conduct your own due diligence of your company to ensure there are no problems that could delay or otherwise adversely affect the sale, including any corporate, regulatory, or third-party consents that may be required for the sale.  Your legal and financial advisors can guide you in your diligence efforts to help you discover any issues or problems during this stage, so that you have time to either cure any problems or develop negotiating strategies to deal with them.

Letter of Intent

A letter of intent (sometimes referred to as an LOI, memorandum of understanding (MOU), or term sheet) is a letter agreement which is usually entered into early in the sale process, setting forth the parties’ initial understanding of key terms of the deal.  The LOI helps the parties identify deal breakers early in the deal process before the parties incur significant costs.  An LOI is generally not intended to create a legally binding commitment to close the transaction on the terms set out in the LOI, but the parties often include certain binding provisions in the LOI like exclusivity commitments, expense sharing, and confidentiality covenants.

The seller typically wants the LOI to be as detailed as possible because once the LOI has been signed, and especially if the buyer is given exclusivity in the LOI, the leverage in the negotiations shifts to the buyer.  Usually, the letter of intent is drafted by the buyer’s counsel, but the seller should negotiate the LOI carefully with the help of its legal and financial advisors.

A seller should resist earnouts, claw-backs, holdbacks, and large escrows at the LOI stage (and during negotiation of the definitive transaction documents), all of which are commonly proposed by buyers.  In the LOI, a seller should negotiate and include acceptable liability caps, deductibles, and survival periods for seller’s representations and warranties, as well as a narrow set of “fundamental” representation and warranty categories, all of which will be incorporated into the purchase agreement.  If economically feasible for the transaction, a seller should push the buyer to agree at the LOI stage to purchase representation and warranty insurance.

Deal Structure

At the LOI stage, the parties are not always prepared to commit to a transaction structure, but it is wise to select a transaction structure which is advantageous to the seller in the LOI if possible.  Selecting the best structure is critical to the success of your transaction. The three legal structures most commonly used to sell a business are:  (1) asset sale; (2) stock sale; and (3) merger.  Choosing which structure to use involves many factors, and buyers and sellers often have competing interests.

In an asset sale, the buyer acquires specific assets and liabilities of the target company as described in the asset purchase agreement. After the deal closes, the buyer and seller maintain their corporate structures, and the seller retains those assets and liabilities not purchased by the buyer.  Asset sales are often disadvantageous to sellers because the seller is left with known and unknown liabilities not assumed by the buyer, and the seller usually receives better tax treatment when selling stock.  Also, asset acquisitions are typically more complicated and time-consuming than stock acquisitions because of the formalities of assigning specific assets, and the numerous third-party consents which are often required.

In a stock sale, the buyer acquires the target company’s stock directly from the selling stockholders, thus the buyer indirectly acquires all of the target company’s assets, rights, and liabilities.  Sellers often prefer to sell stock since they are not left with any contingent liabilities. In addition, sellers typically receive better tax treatment when selling stock as opposed to assets.

A merger is a stock acquisition in which two companies combine into one legal entity. The surviving entity assumes all assets, rights, and liabilities of the non-surviving entity.  Mergers sometimes require less than unanimous consent from the target company’s stockholders while still allowing the buyer to obtain 100% of the stock, which provides an advantage over a stock acquisition (where usually all of the stockholders must agree to sell).  A merger is therefore a good choice for buyers that want to acquire a going concern that has many stockholders, especially when some of them may be opposed to selling their stock.  However, the corporate laws of most states provide that dissenting stockholders to a merger can petition the court to force the buyer to pay them “fair value” for their shares. This process often adds additional time, complexity, and expense to a merger.

Definitive Agreements, Continued Due Diligence, and Closing

Once you have a signed LOI, the buyer’s counsel usually provides proposed drafts of the purchase agreement and other important transaction documents.  The purchase agreement is the primary transaction document, and it describes what is being sold, details the sale process, and lays out the liabilities and obligations of the parties.  The purchase agreement is usually heavily negotiated over 1-2 months and sometimes longer, depending on the complexity of the transaction and the parties’ respective willingness to compromise.

While the parties are negotiating the purchase agreement and other transaction documents, the buyer continues its due diligence of the target company.  The buyer may use certain information it discovers in the due diligence process to negotiate contractual protections (such as indemnification) in the purchase agreement or to adjust the purchase price.

There is often a period of time between signing the purchase agreement and closing. This may be for legal or practical reasons. For example, the parties may need to obtain regulatory and/or third-party consents for the transaction, but they may not want to pursue such consents until they have a signed purchase agreement.

Purchase agreements for M&A transactions are usually lengthy and complex documents.  Your legal counsel can help you understand your rights and obligations under the purchase agreement and help you negotiate a fair and reasonable agreement so that you can minimize your liability and hold on to your sale proceeds.

Employers nationwide can breathe a collective sigh of relief. On Friday November 15, 2024, District Judge Sean D. Jordan of the federal district court for the Eastern District of Texas granted a motion for summary judgment finding that the Department of Labor’s 2024 Rule – that would have increased the minimum salary level required to qualify executive, administrative, and professional employees for overtime exempt status to $58,565 per year ($1,128 per week) effective January 1, 2025 – is legally invalid. State of Texas v. United States Department of Labor, United States District Court for the Eastern District of Texas, Civil Action No. 4:24-CV-499.

The first phase of the DOL’s 2024 Rule (which went into effect July 1, 2024) that increased the minimum salary level from $35,568 per year ($684 per week) to $43,888 ($844 per week) was also struck down part of the Court’s decision. Judge Jordan found that the DOL’s 2024 Rule exceeded its statutory authority under the federal Fair Labor Standards Act. In reaching this decision, the Court relied on the expanded standard of judicial review of federal agency action announced in the Supreme Court’s recent Loper Bright decision.

The Court’s decision vacating the 2024 Rule pursuant to the federal Administrative Procedures Act applies nationwide. An appeal of the District Court’s ruling to the federal Fifth Circuit Court of Appeals is a possibility, so employers should continue to monitor future developments carefully. But for now, employers can continue to qualify their executive, administrative, and professional employees as overtime exempt (for purposes of the federal Fair Labor Standards Act) at the current annual salary requirement of $35,568 per year ($684 per week).

Louisiana’s Senate Bill 1, introduced during the recent 2024 Third Extraordinary Legislative Session, aims to establish specialized business courts in Louisiana through a state constitutional amendment.  The bill seeks to amend the constitution and give the legislature the authority to create “specialized” courts.  This proposed amendment must first receive two-thirds approval in both the Louisiana Senate and House. If passed, the amendment will appear on voters’ ballots on either March 29th or November 15th of 2025. The legislature would need to then attempt to pass additional laws to create specialized courts designed specifically to handle complex business disputes, such as commercial, corporate, and banking cases, streamlining the process and making it more efficient. Proponents suggest the establishment of business courts could be a significant development for the legal and business communities in Louisiana. Several other states already have similar business courts, including Delaware, New York, Michigan, North Carolina, and Georgia.

For bill text seeSB1

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Louisiana legislators consider giving themselves the authority to set up ‘business’ court

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Out-of-state defendants are sometimes surprised to learn that their lack of minimum contacts with the forum state is irrelevant if the lawsuit against them is filed as an adversary proceeding in a federal bankruptcy court. For example, a company or individual that has minimum contacts with the United States as a whole, but not with Louisiana specifically, is still subject to the jurisdiction of a United States Bankruptcy Court in Louisiana. A defendant’s motion to dismiss for lack of personal jurisdiction based on having no contacts with the forum state will be denied.

Federal district courts have original jurisdiction over any civil action that is “related to” a bankruptcy case. See 28 U.S.C. § 1334(b). Most, if not all, federal district courts have a Standing Order or Local Rule that refers civil actions related to a bankruptcy case to the federal bankruptcy court where the bankruptcy case is pending. When a civil action is pending in federal bankruptcy court, the Federal Rules of Bankruptcy Procedure (“FRBPs”) apply. The FRBPs incorporate most of the Federal Rules of Civil Procedure, but there are several key differences.

One difference that bankruptcy litigation novices may not be familiar with is FRBP 7004(d), which allows a summons and complaint for an adversary proceeding pending in federal bankruptcy court to be served “anywhere in the United States.” So long as the “exercise of jurisdiction is consistent with the Constitution and the laws of the United States,” the defendant is subject to personal jurisdiction in the federal bankruptcy court where the adversary proceeding is pending. Fed. R. Bankr. P. 7004(f). That is materially different from Federal Rule of Civil Procedure 4’s provision that service of a summons establishes personal jurisdiction over a served defendant only if that defendant “is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located,” i.e., a defendant with minimum contacts in the forum state. Fed. R. Civ. P. 4(k)(1)(A). The key question for a minimum contacts analysis in federal district court — is the defendant subject to jurisdiction of the forum state? — is completely irrelevant in federal bankruptcy court. With nationwide service of process, the forum is the United States. “So minimum contacts with the United States (Fifth Amendment due process) suffice; minimum contacts with a particular state (Fourteenth Amendment due process) are beside the point.” Double Eagle Energy Services, L.L.C. v. MarkWest Utica EMG, L.L.C., 936 F3d 260, 264 (5th Cir. 2019) (citations omitted).

Defendants in adversary proceedings often have many legal defenses available that an experienced bankruptcy lawyer can help them plead and prove. But 99 times out of 100, asserting that the bankruptcy court lacks personal jurisdiction over a defendant will not accomplish anything more than showing that defense counsel has very little experience with bankruptcy litigation.