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Litigation Services Handbook: The Role of the Financial Expert, 5th Edition by David P. Hoffman, Daniel G. Lentz, Roman L. Weil

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Chapter 21

Merger and Acquisition Transaction Disputes

Jerry M. HansenChristen L. MorandGregory E. Wolski

21.1 Introduction

Merger and acquisition (M&A) transactions involve financial and accounting professionals in almost all phases of the transaction from the initial letter of intent to due diligence to contract negotiation to postclosing activities. An additional potential aspect of any M&A deal is a postclosing dispute. While most parties to a transaction never plan for a transaction dispute to occur, if one develops, it can raise significant issues for the parties. Accounting professionals can, and often do, play a key role in the dispute resolution process. In addition, the global environment in which companies now operate has created new transaction risks and areas of dispute that pose important considerations in any transaction or dispute resolution. This chapter provides an overview of the common causes of M&A disputes as well as the emerging causes of M&A disputes related to cross-border transactions and the accountants’ roles in the dispute resolution process. This chapter also discusses areas in which accountants can help companies avoid M&A disputes.

21.2 Overview of the Merger and Acquisition Transaction Life Cycle

An M&A transaction has four primary phases to its life cycle:

1. Strategic and pretransaction planning. The initial negotiation of deal terms and the execution of a letter of intent.
2. Due diligence activities. Traditional financial and tax due diligence. ...

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