What Can Make A Purchase Transaction Fail?
Things happen. Sometimes a Buyer agonizes over whether to walk away from a business purchase.
Here are some deals gone bad that we’ve experienced:
One of the major assets of the Seller is a contract that turns out cannot be assigned. This can be a contract supplier with an especially good price, a software license or a customer contract.
Key equipment fails during due diligence, and it makes no financial sense to buy the business.
The lease cannot be assigned or the landlord takes the opportunity to jack up the rent.
Buyer can’t get favorable financing.
The troubled Seller has to declare bankruptcy before the closing occurs.
It is important to have the ability to terminate the purchase agreement when mishaps occur.