Securing a Seven-Figure Award from an Asset Purchase Agreement Breach

The Challenge:

Our client, the seller of an electrical contracting company, entered into an Asset Purchase Agreement (APA) with a buyer. A key term of the deal involved a lucrative, multi-million dollar cost-plus contract that was already in progress. To ensure the seller received their fair share of this ongoing project, the APA specifically carved it out, entitling the seller to a portion of the gross profit upon its completion.

After the sale was finalized and the project completed, the buyer reneged on this agreement. They refused to pay the seller anything beyond the work completed prior to the sale, effectively attempting to confiscate the value of the contract that was rightfully the seller’s.

Faced with this breach of contract, our client needed to not only prove their entitlement to the carved-out gross profit but also required a thorough forensic analysis of the APA itself to understand the full extent of their legal position.

The Approach:

Our forensic accounting team conducted a meticulous line-by-line review of the Asset Purchase Agreement and all associated schedules. We analyzed the transaction’s financial flows and the specific language governing the carved-out contract.

Our analysis revealed a critical finding: due to ambiguous and poorly drafted wording in the APA, the buyer’s interpretation was not only incorrect but fundamentally flawed. We determined that the contractual language did not merely entitle the seller to a portion of the profit from the completed contract. Instead, the wording could be reasonably interpreted as granting the seller entitlement to the revenue generated by the entire project.

We prepared a comprehensive report that detailed this analysis, clearly demonstrating how the plain language of the contract supported our client’s stronger claim. This report formed the foundation for our expert testimony.

The Results:

Armed with our definitive forensic analysis and expert testimony, our client pursued litigation. In court, we clearly explained the financial implications of the APA’s wording and the significant value the buyer had attempted to withhold.

The court ruled decisively in favor of our client. The judge awarded the seller a settlement in excess of $1,000,000, a figure that reflected the stronger position our analysis uncovered. The ruling confirmed that our forensic examination correctly interpreted the contract, transforming a dispute over profit-sharing into a successful claim for a substantially larger portion of the contract’s value. Our work was directly cited as instrumental in achieving this successful outcome.

Facing a Complex Contract Dispute After a Business Sale?

This case demonstrates how a poorly drafted agreement can create significant financial exposure. Our expertise lies in meticulously analyzing transactional documents to protect your interests, whether you are the buyer or seller in a business acquisition. We uncover the contractual and financial realities that others miss, providing the clear evidence needed for commercial litigation or settlement negotiations.

Securing a Seven-Figure Award from an Asset Purchase Agreement Breach

The Challenge:

The Approach:

The Results:

Facing a Complex Contract Dispute After a Business Sale?

Turn Evidence into a winning strategy