Ana Calves, an associate in the Business & Finance Practice, authored an article in The Legal Intelligencer on alternatives to restrictive covenants in M&A transactions. Traditionally, restrictive covenants have been used by sellers to protect the value of their investments, however they have fallen under increased scrutiny and advisors are encouraging sellers to pursue alternatives. In the article, Ana outlines several alternatives, including maintaining an equity interest, deferring a portion of the purchase price, and involving the seller in the buyer’s post-closing transition efforts, either formally or informally. These alternatives are just some of the affirmative steps that buyers can take to incentivize sellers to not compete with or take harmful actions against the target company and often times may have additional benefits.
To read the full article, click here.
