Most commonly it’s treated as debt-like and reflected either through a purchase price adjustment or a specific indemnity rather than being left vague. In asset deals often: Carve the liability out entirely with a clean asset perimeter, plus strong reps that no successor liability transfers. If that’s not fully achievable, use a dollar-for-dollar price reduction based on an agreed actuarial number. Key is aligning legal structure with commercial reality: price it explicitly, don’t rely on generic reps, and avoid open-ended exposure post-close.

In practice, lenders focus less on legal structure and more on whether the exposure is clearly quantified and actually resolved. The most conservative approach is the seller paying it off or entering into a fund-approved settlement before close. In SBA deals especially, a simple dollar-for-dollar price reduction is often not enough, since that effectively shifts the obligation to the buyer. Lenders will then want to see a clear, buyer-side solution for how and when the liability will be funded, not just reps. One important caveat is that once the withdrawal liability becomes a meaningful percentage of purchase price, it often stops being a structuring issue and turns into a valuation and contention point, as the seller realizes their prior decision not to fund it translates into a very large price reduction.