Litigation Arising from Business Purchase and Sale Agreements

Even carefully planned business purchases and sales can go wrong. Financial results may not match what was promised, undisclosed liabilities may surface after closing, or one side may accuse the other of manipulating post‑closing metrics. When that happens, buyers and sellers need experienced trial lawyers who understand both deal documents and the realities of business operations.

For over 40 years, DiTommaso Lubin, P.C. has prosecuted and defended lawsuits arising out of stock purchase agreements, asset purchase agreements, and mergers, including fraud‑in‑the‑inducement claims and disputes over representations and warranties.

Fraud in the Inducement and Misrepresentation in Business Sales

We represent buyers and sellers in cases involving:

• Allegations that sellers inflated revenues, profits, or customer counts to induce a sale.
• Claims that financial statements, tax returns, or POS data were falsified, incomplete, or misleading.
• Accusations that material liabilities or adverse trends—such as loss of key customers, regulatory investigations, or vendor problems—were concealed during negotiations.
• Disputes over misleading offering materials, broker presentations, or management presentations.

Our cases have included lawsuits where buyers alleged that businesses were “built on fake numbers” and that asset purchase agreements contained written warranties that financial statements were accurate when they were not. We have asserted and defended common‑law fraud, negligent misrepresentation, consumer‑fraud, and breach‑of‑contract claims in these settings.

Breach of Representations and Warranties

Many business purchase agreements include detailed representations and warranties about the condition of the business—financial statements, contracts, compliance, litigation, employees, and more. When these turn out to be inaccurate, buyers may seek damages or rescission, and sellers may face substantial exposure.

We handle disputes involving:

• Alleged breaches of financial‑statement and no‑material‑adverse‑change representations.
• Claims concerning undisclosed contracts, customer disputes, regulatory issues, or tax liabilities.
• Disputes over the scope of indemnity, caps and baskets, survival periods, and notice requirements.
• Conflicts over escrow releases and holdbacks tied to representations and warranties.

Purchase‑Price Adjustments, Earn‑Outs, and Post‑Closing Disputes

Post‑closing disputes often arise over:

• Working‑capital or other purchase‑price adjustments tied to closing‑date balance sheets.
• Earn‑out provisions that depend on post‑closing performance, including disagreements over accounting methods, allocation of expenses, and operational decisions.
• Alleged interference with earn‑out targets or failure to operate the acquired business in good faith.

We work with forensic accountants and industry experts to analyze financial issues, test competing theories, and present clear explanations to courts, arbitrators, and mediators.

Related Claims and Advisor Liability

Business‑sale disputes often involve additional claims, including:

• Legal‑malpractice, accounting‑malpractice, and broker‑liability claims arising from failed or mishandled acquisitions.
• Breach‑of‑fiduciary‑duty claims against insiders or advisors who allegedly benefited at the expense of the buyer or seller.
• Restrictive‑covenant disputes over non‑competition and non‑solicitation agreements tied to the sale of a business.

Our experience in business‑tort, fiduciary‑duty, and restrictive‑covenant litigation complements our work in deal‑related cases.

Talk With Our Business‑Sale Litigation Team

If you are involved in a dispute arising from the purchase or sale of a business—including fraud in the inducement, breach of representations and warranties, or post‑closing adjustment or earn‑out disputes—our trial lawyers can help you assess your options and pursue or defend claims.

Contact attorney Peter S. Lubin or attorney James V. DiTommaso for a free consultation.

Call 630-333-0333 or reach us through our online contact form.

This page is for informational purposes only and does not constitute legal advice. Contacting us does not create an attorney–client relationship. Past results do not guarantee a similar outcome.