💡
Clouds" in the title to critical tangible (real estate, equipment, inventory) and intangible (patents, trademarks, and so on) assets. Be sure that the seller has clear title to these assets and that they are conveyed without claims, liens, and encumbrances. Employee matters. There are a wide variety of employment or labor law issues or liabilities that may be lurking just below the surface but will not be uncovered unless the right questions are asked. Questions designed to uncover wage and hour law violations, discrimination claims, OSHA compliance, or even liability for unfunded persons under the Multiemployer Pension Plan Amendments Act should be developed. If the seller has recently made a substantial workforce reduction (or if you as the buyer are planning post-closing layoffs), then the requirements of the Worker Adjustment and Retraining Notification Act (WARN) must have been met. The requirements of WARN include minimum notice of sixty days prior to wide-scale terminations. The possibility of environmental liability under CERCLA or related environmental regulations. Unresolved existing or potential litigation. These cases should be reviewed carefully by counsel. A seller's attempt to "dress up" the financial statements prior to sale. Often this is an attempt to hide inventory problems, research and development expenditures, excessive overhead and administrative costs, uncollected or uncollectible accounts receivable, unnecessary or inappropriate personal expenses, unrecorded liabilities, tax contingencies, and other such issues.