prevailing in post-transaction misery

January 30, 2025

by a searcher from University of California, San Diego in Portland, OR, USA

could anyone share their experiences with a transaction that became contentious with the seller post-close, the circumstances and what they did to overcome it (or not)? currently working through a number of material breaches with a seller and seeking advise on how to resolve numerous material breaches. seller has turned out to be entirely untrustworthy and quite comfortable with misrepresenting material facts and circumstances of the business and its financial position.

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Reply by an investor
from University of California, San Diego in San Francisco, CA, USA

Unfortunately, your situation is not uncommon. Lots of bad actor sellers out there. And, many co-conspirator or complicit brokers (although most brokers are good folks.). As you enter the world of ETA, you become an "entrepreneur" in the world of SMB and by definition, are now swimming in shark infested waters. Play the game for a while and you'll start to become adept at smoking out the villains. But, unfortunately, many first time buyers/searchers/independent sponsor fall prey to bad actors. So, if nothing else, you can have a bit of comfort that many others have faced the challenges that you're facing. One way or another, you'll invariably get through your situation and if you digest the lessons, you'll become stronger and better in the future. Good luck!

Reply by an investor
from University of Illinois at Urbana in Chicago, IL, USA

Thanks ^redacted‌. My recommendations are to (1) do a really really good job documenting the issues and (2) talk to your counsel. You can start off trying to be solutions oriented, but you may need to ramp up to legal missives, actions. Bad actors are out there, you need to protect yourself and your investment and if needed take legal action. I have seen some bad stuff, and heard of some horrible stuff. But if you have good partners and good counsel, you can hopefully muscle through it. Make sure your lawyer is practical, but you may need to go that route. If they did a good job on the agreements, you should be able to move through the problem.

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