Disputes that follow a closing
Most acquisitions litigation is about money the purchase agreement left open. Purchase price adjustments based on closing working capital often go first to an independent accountant under a dispute mechanism in the agreement, and a court's role may be limited to enforcing that process. Earnout disputes turn on whether the buyer ran the acquired business in a way that undercut the milestones, measured against whatever operating covenants were written. Indemnification claims for breached representations are governed by the agreement's caps, deductibles, survival periods, and notice requirements, and late or vague notices are a frequent problem. Fraud claims may reach beyond those limits, but many agreements contain non-reliance language that narrows what a buyer can say it relied on.
When the deal falls apart before closing
Broken-deal litigation looks different. One side may claim a material adverse effect, a failed closing condition, or a breach of the promise to run the business normally between signing and closing. Delaware courts, where many of these disputes are heard, have treated a material adverse effect as a demanding standard. Remedies depend heavily on the agreement: some allow specific performance to force a closing, while others limit the remedy to a termination fee. Stockholder suits challenging a public company merger are a separate category, focused on director duties and disclosure and, when the company is incorporated in Delaware, often brought in the Court of Chancery. Speed matters in these cases, since a court may be asked to rule before the agreement's outside date passes.
First steps on either side
Pull the purchase agreement, disclosure schedules, ancillary agreements, and closing statements, and read the dispute resolution, notice, and survival provisions before sending anything. Preserve the data room, diligence reports, and internal deal communications, which tend to become central evidence on knowledge and reliance. Sellers should check whether a non-compete or a continuing role in the business affects their leverage. Representations and warranties insurance may change who pays and who controls the claim, so notify the insurer as the policy requires. In an early meeting we work out which forum the agreement requires, which deadlines are running, and whether negotiation or a formal claim should come first.
