Recently I was handed a buyer-side executed LOI with the words throughout the LOI “asset and/or stock purchase agreement. Face. Palm. Asset and stock sales make both very different legal and financial assumptions, including as to the purchase price.
Due to the nature of the business, the parties ultimately agreed on a stock sale. During negotiations, the cracks of the poorly worded LOI started to show.
The sellers wanted to retain certain deposits made to third parties. The buyer rightfully argued that the deposits belong to the target company. None of this was discussed was during the LOI negotiations and unfortunately, the negotiations started to break down.