Representations and Warranties in Mergers and Acquisitions (M&A)

#mergersandacquisitions #corporatelaw #business

Representations and warranties (or reps & warranties) come up often in the world of mergers and acquisitions. Whether you're the seller or the buyer of a business, reps and warranties make up a significant portion of the final purchase agreement.

"What are representations and warranties? Why are they so important?" you ask. Well, dear viewer, put simply, they are statements about the state of the business that serve as the basis for indemnification and an allocation of risk between the buyer and the seller.

That's the explanation put simply. If you want to know more (and you should), watch the video where Brett makes six main points about the role of representations and warranties from his perspective as a corporate lawyer.

Here's a quick rundown in case you want to jump ahead:
0:51 - Representations and warranties are statements about a business
2:00 - Reps and warranties as basis for indemnification
4:36 - Why reps and warranties are important when buying a business
5:39 - Representations and warranties aren't always facts
6:58 - Reps and warranties as allocations of risk
7:34 - They are almost always joint and several
10:21 - The two main qualifiers: knowledge & materiality

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Have questions? Book a call, and talk to Brett today:
https://clarity.fm/brettcenkus

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You can reach Brett through:

https://clarity.fm/brettcenkus
  / brettcenkus  
  / bcenkus  
https://www.cenkuslaw.com
https://braatenwoods.com
https://merger-resources.com


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Brett A. Cenkus has 20+ years of experience in business law, finance, and entrepreneurship. Through Cenkus Law, PC, he provides advice and services for mergers & acquisitions (M&A), securities offerings, founders’ agreements, and other general business law issues.

Through Braaten Woods, LLC, Brett helps business owners in the lower middle market ($2MM - $25MM) position themselves for sale, find buyers, negotiate, and close M&A deals.

Brett also maintains merger-resources.com, a site packed with free articles, videos, checklists, deal diagrams, template contracts, and other tools to help pass M&A knowledge to others.

Brett regularly consults with entrepreneurs and invests his own capital as an angel investor.

From 2010-2013, Brett served as Chief Legal Counsel of a publicly-traded international oilfield services company. From 2001 to 2006, he and a partner founded and built Paragon Residential Mortgage. Bridge Investments acquired Paragon in 2006.

Brett holds a Juris Doctorate from Harvard Law School and a Bachelor of Arts degree in Economics from Messiah College in Grantham, Pennsylvania.

Brett lives in Austin with his wife, Cathryn, and two children. He enjoys reading, squash, classic movies, great food and wine, and the New England Patriots.