You Need a Lawyer for a San Diego Asset Purchase

You Need a Lawyer for a San Diego Asset Purchase – Acquisitions

Why do you need a lawyer for a San Diego asset purchase?  When should you contact an experienced and proven California asset purchase lawyer at the Watkins Firm?  Any time you intend to purchase another company’s inventory, equipment, real estate, customer base, production lines, vehicles, technology or other assets you must protect your exposure to hidden liabilities and work with the proven San Diego mergers and acquisitions attorneys at the Watkins Firm to ensure a smooth and profitable transaction.

Asset purchase agreements are often quite legally complex.  This is much more than simply passing title to property or verifying the condition of equipment or underlying liens.  Many business owners and executives fail to understand the risks associated with an asset purchase.  Our job is to protect you throughout the process while helping you to acquire assets which position your company for expansion and opportunity.

You need a lawyer for a San Diego asset purchase who not only thoroughly understands the nature of “deal making” and the subtleties of a negotiation, but the risks involved.  We help to create a cooperative and productive atmosphere while getting to the bottom of the information necessary to complete a comprehensive due diligence and to assure clear title free of any liens or encumbrance.  An asset purchase contract allows your company to acquire specific assets while protecting a favorable tax position and eliminating contingent liabilities.  Our effective strategies for restructuring tax basis allow you to earn an accelerated Return on Investment (ROI).

Your Watkins Firm attorney may need to negotiate with existing finance companies or lien holders to ensure a smooth transfer and to protect your position in the transaction.  Asset purchase agreements allow you to acquire the equipment, real estate or expansion necessary to fuel future opportunity and profit.  You need a lawyer for a San Diego asset purchase and this is why it is important to seek the experienced counsel and representation of the experienced business attorneys at Watkins Firm.  These transactions do carry substantial risk and exposure to significant contingent liability if they are not carefully managed, structured and executed.

Dan Watkins Founding Partner of the Watkins FirmPro-Tip: “Transferring title to an asset. Well, first of all, the reason you want to do an asset purchase is because when you are buying the actual assets as they’re being described, you want to ensure they’re being sold to you in a manner where you don’t have to worry about all the other problems or secrets this corporation and its shareholders may have, or liens that may be in place against the asset(s).

An asset purchase, will often entail an escrow. You create an escrow for the company and you send out a notice that ‘I bought this company’s assets. And if you’re a creditor, you have 60 days to come and make a claim. Otherwise, after that I’ll own not only the, the equipment I’ll own, the Goodwill, I’ll own the name, the IP, everything free and clear.’ If there are any creditors claims, when you buy the shares, then you end in a situation where you’re not buying the assets, you’re buying whatever the shares have power over, and that can be complicated and hard to understand or even know what you’re getting. So from that point of view, and also for the tax advantages of depreciating assets and other things, most people prefer an asset purchase.

So when an asset is encumbered, it the responsibility of the seller to disclose that. Do you know how to handle things when there are UCCs, liens or encumbrances against an asset? That happens a lot and you may need to provide for what we call carve outs or clauses in the agreement where the money comes in, goes into an escrow account, whether it’s our trust account or an actual commercial escrow company, like Chicago Title or First American Title. And then you put escrow instructions in and say, ‘okay, when the money comes in, the escrow, the officer is instructed to pay off this creditor or that creditor,’ or you also have a carve out, and you’ll enter into a new agreement with the vendors or the creditors to keep doing business with them. So all those types of things are included when you do an asset purchase.” – Dan Watkins, Founding Partner

We invite you to review our podcast Episode 13 – Mergers and Acquisitions as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.