Sale of an SME with a controlled representations and warranties package
A managing director wished to sell his services company and was concerned that an overly broad warranty could expose his personal assets after the sale.
Issue at stake : Securing the price while capping the representations and warranties and limiting their duration.
- • Preparation of the data room and review of risks before the sale.
- • Negotiation of the SPA: warranty cap, threshold, duration and security.
- • Coordination with the tax team on the structuring of the disposal.
Outcome : The sale was completed with a framed warranty and an escrow mechanism, reducing the seller's exposure after closing.