NewsWebinarThe Importance of Representations and Warranties Insurance in Staffing M&A

June 13, 20230

The Importance of Representations and Warranties Insurance in Staffing M&A

If you are the owner of a staffing firm considering a sale of your company or a first-time buyer, you may never have heard of Representations and Warranties Insurance (RWI). However, experienced buyers, sellers and M&A professionals know RWI is a frequently used tool for facilitating transactions that can benefit both buyers and sellers.

In every sale of a business, sellers will be required to make specific written statements in the purchase agreement about their businesses (representations) and warrant that those representations are true (warranties). Those representations and warranties usually relate, among other things, to corporate organization, compliance with laws, financial statements and liabilities,customers, contracts, intellectual property, liens, litigation and claims, taxes,employees and benefits. In a typical deal structure, if those representations and warranties are inaccurate, sellers must then indemnify (make whole) buyers for any resulting losses buyers suffer (subject to customarily negotiated survival periods for claims, deductibles, caps and other limitations on recovery).

About Paul H. Pincus

Paul H. Pincus is a partner at Ortoli Rosenstadt LLP, where his practice focuses on complex mergers and acquisitions, corporate law, contracts and licensing, executive retention agreements, and employment law, for domestic and international companies. Paul is head of the firm’s private company mergers and acquisitions practice, a member of the firm’s corporate and global mobility practices, and head of the firm’s employment law and staffing practices.

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About Paul H. Pincus

Paul H. Pincus is a partner at Ortoli Rosenstadt LLP, where his practice focuses on complex mergers and acquisitions, corporate law, contracts and licensing, executive retention agreements, and employment law, for domestic and international companies. Paul is head of the firm’s private company mergers and acquisitions practice, a member of the firm’s corporate and global mobility practices, and head of the firm’s employment law and staffing practices.