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Money Now or Later? Earn-outs in M&A Agreements

August 15, 2023 (2 min read)

Parties may agree to sweeten the deal by including an earn-out after closing. While economically advantageous for the parties, earn-outs can become the source of disruptive post-closing disputes. It is imperative to understand the underlying metrics and carefully document dispute resolution procedures to avoid or mitigate these potential disputes. Brush up on earn-out clauses and relevant buyer and seller distinctions before negotiating the next turn of your M&A transaction agreement.

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