When the Deal Closes—and the Dispute Begins
Buying or selling a business is often the culmination of years of work and millions of dollars of investment. But closing does not always end the deal. Sometimes it is only after the buyer takes control that problems begin to surface.
Financial results do not match what was represented. Inventory is overstated. Liabilities were not disclosed. Working capital is disputed. A business cannot perform as promised. Or the parties simply have fundamentally different views of what the purchase agreement requires.
At Shore Law, Kenneth Shore represents businesses, buyers, sellers, investors, and executives in complex disputes arising from mergers, acquisitions, stock purchases, and asset sales.
These are not ordinary breach-of-contract cases. M&A litigation often requires the lawyer to reconstruct the transaction, understand the financial statements and accounting records, analyze the representations and warranties, and determine what the parties knew—and when they knew it.
That is where Shore Law brings a different perspective.
Post-Closing Fraud and Breach of Representation and Warranty Claims
A buyer may spend months conducting due diligence and negotiating a detailed purchase agreement. But due diligence does not necessarily reveal everything.
After closing, a buyer may discover that the business it acquired is materially different from the business that was presented during the sale process.
Disputes may involve allegations concerning:
- False or misleading financial information
- Breach of representations and warranties
- Fraud or fraudulent inducement
- Concealment of known business problems
- Undisclosed liabilities
- Overstated inventory or work in process
- Inadequate warranty or loss reserves
- Improper revenue recognition
- Uncollectible or overstated accounts receivable
- Customer losses or undisclosed customer concentration issues
- Working-capital and purchase-price adjustments
- Earnout calculations
- Misrepresented backlog or sales projections
- Compliance or regulatory problems
- Undisclosed litigation or threatened claims
- Indemnification and escrow disputes
The central question is often simple:
Did the buyer receive the business it was told it was buying?
Answering that question, however, can require a detailed investigation of accounting records, emails, board materials, due-diligence disclosures, data-room documents, financial projections, and the negotiations that led to the final purchase agreement.
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Understanding the Numbers Behind the Deal
The purchase agreement may contain pages of representations concerning financial statements, inventory, receivables, liabilities, taxes, customers, contracts, and the ordinary course of business. Determining whether those representations were true may require more than simply reading the agreement.
Kenneth Shore is both an attorney and a Certified Public Accountant. That financial background gives Shore Law the ability to identify accounting and financial issues that may be missed when an acquisition dispute is viewed solely as a legal matter.
Shore Law understands how to examine:
- General ledgers and trial balances
- Inventory and work-in-process records
- Accounts-receivable aging
- Revenue recognition
- Accrued liabilities
- Warranty and loss reserves
- Customer deposits and deferred revenue
- EBITDA and earnings adjustments
- Working-capital calculations
- Financial forecasts and projections
The numbers frequently tell the story.
Shore Law's job is to find that story, connect it to the representations made during the transaction, and present it clearly to the court or jury.
Fraud During the Sale Process
Not every post-closing problem is fraud. Businesses change. Customers leave. Markets decline. Forecasts can be wrong. But there is a difference between a business risk and a seller knowingly presenting a false picture of the company to obtain a higher purchase price. Fraud claims arising from an acquisition may involve what was affirmatively represented, what was concealed, and whether information provided during due diligence was designed to create a misleading impression of the business. These cases often require reconstructing the sale process from the beginning:
- What did management know?
- What was disclosed to the buyer?
- What was left out?
- Were internal reports inconsistent with the information presented in the data room?
- Were known problems minimized while the transaction was being negotiated?
- Did the seller make promises or representations to keep the buyer moving toward closing?
- And what did the buyer rely on when it agreed to the purchase price?
Shore Law approaches these cases as an investigation first and a lawsuit second. Shore Law works to understand the business, follow the documents, and identify the evidence that explains what actually happened.
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Defending Sellers Against Post-Closing Claims
Post-closing M&A litigation is not always the result of seller misconduct. A buyer may experience disappointing results after closing and attempt to convert ordinary business problems into fraud or indemnification claims. Integration failures, changes in management, lost customers, or a changing market can quickly lead to accusations that the seller misrepresented the business. Purchase agreements are negotiated risk-allocation documents. Survival periods, indemnification limitations, baskets, deductibles, caps, exclusive-remedy provisions, anti-reliance language, disclosure schedules, knowledge qualifiers, and definitions of loss can determine whether a buyer has a valid claim at all.
Shore Law represents sellers and other parties accused of fraud or breach of representations and warranties. Shore Law focuses on the agreement the parties actually signed and whether the buyer is attempting to rewrite the transaction after the fact.
A bad result after closing does not automatically mean the seller committed fraud.
Experienced Representation in Complex Post-Closing Business Disputes
Whether you acquired a business and believe critical information was concealed, or you sold a company and now face allegations of fraud or breach of representations and warranties, the decisions made at the beginning of a dispute can significantly affect the outcome. Documents must be preserved. Financial records must be analyzed. The purchase agreement and disclosure schedules must be examined together. And the case must be built around the business reality of the transaction—not simply the allegations in a lawsuit.
Shore Law represents clients in complex M&A and post-closing litigation involving fraud, breach of contract, representations and warranties, indemnification claims, and financial disputes.
When millions of dollars and the value of a business are at stake, you need a lawyer who understands both the contract and the numbers behind it.
Contact Shore Law to discuss your dispute.
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