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Debts carried by a business for sale are a concern for both the seller and the buyer. Unless the liabilities of the business exceed that value of the business, these debts are less of a concern for a seller.
These debts are expected to be paid off in the acquisition process so that the business is clear of these liabilities in the hands of the new owner. However, the buyer will want to ensure they cover themselves legally in the buying process and will want to handle the payment of debts directly (or via their attorney).
Let’s dive into some tips about dealing with debts in your next M&A deal.
Be sure to comment with any thoughts or questions you have about business law, strategy, mergers and acquisitions or anything else on your mind.
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For a deeper dive into and other legal issues vital to the success of your deals and your business, visit me at:
http://www.cenkuslaw.com
Just starting up? Check this out for my advice on startup success: http://www.thestartupshepherd.com.
You can also reach me at:
https://www.linkedin.com/in/brettcenkus
http://www.cenkuslaw.com
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About me:
My 20+ years of experience in business finance, business law and entrepreneurship have led me to believe that numbers and logic are awesome tools, but understanding human nature and emotions is the first step to business success.
The Cenkus Law Firm provides services related to mergers & acquisitions, general business issues and startups, including founders’ agreements and fundraising. I also consult with entrepreneurs and have invested my own capital as an angel investor.
From 2010-2013 I served as Chief Legal Counsel of a publicly-trade international oilfield services company. From 2001 to 2006 me and a partner founded and built Paragon Residential Mortgage. Paragon was sold to Bridge Investments in 2006.
I hold a Juris Doctorate from Harvard Law School and a Bachelor of Arts degree in Economics from Messiah College in Grantham, Pennsylvania.
Now, I live in Austin, TX with my wife and two kids. I enjoy reading, running, classic movies, great food and wine and some great American football.
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