Expert Determination in an M&A Dispute

Challenge

FRA was retained by a global chemicals company to represent them in post-closing purchase price adjustment dispute in connection with a $1.1 billion Stock and Asset Purchase Agreement.  At the time FRA was retained there were 46 disputed items totaling nearly $18 million in dispute between the parties. We were retained prior to the commencement of the formal dispute resolution process and were tasked with leading negotiations with the opposing party and ultimately leading the preparation of submissions to the neutral accountant resolving the dispute.

Action

At the outset, FRA led the negotiations with the opposing party on a number of disputed items leading to the resolution, primarily in our client’s favor, of 29 of the disputed adjustments.  Ultimately, 17 disputed items were submitted to the neutral accountant for resolution. These disputed items included pension liabilities, royalties, employee benefits, and a variety of net working capital items such as unrecorded liabilities, inventory reserves, GR/IR, warranties, bad debt reserves, and allowance for doubtful accounts, among others.  FRA prepared the initial submission, the rebuttal submission, and the responses to the neutral accountant, which required extensive review of relevant accounting and transaction documents.

Result‍

The submissions prepared and supported by FRA’s analysis resulted in our client receiving a determination in its favor for the majority of the disputed items in terms of both items won and in the amount won. 

‍

‍