Facilitator Guide

Indemnifiable Losses

Facilitator Guide

Indemnifiable Losses

Topic: M&A Provisions
Duration: 1 hr
Format: Remote or in person

What’s covered

The definition of “loss” or “damages” in a private company acquisition agreement
The impact of this definition on sellers’ indemnification obligations for breaches of reps, warranties, or covenants
Different types of damages (e.g. out-of-pocket; diminution of value; and consequential, punitive, and incidental damages)
Drafting considerations
Buyer and seller perspectives

Before the session

Prepare the Attendees

Send the attendees an invitation for the session. Include this link, which has the videos and exercise they’ll need to prepare.

https://www.hotshotlegal.com/trainings/indemnifiable-losses/attendee

Prepare Yourself

Watch the videos and read the exercise so you’re familiar with the Hotshot material.

Course

Indemnifiable Losses

An explanation of how loss is defined in acquisition agreements, including the types of losses typically included (and excluded) from the definition. Features interviews with ABA M&A Committee members Leigh Walton from Bass, Berry & Sims and Scott Whittaker from Stone Pigman Walther Wittmann.
Course

Indemnifiable Losses: Drafting

A look at how loss is defined in acquisition agreements, including a discussion of buyer and seller perspectives and negotiating positions. Features insights from ABA M&A Committee members Leigh Walton from Bass, Berry & Sims and Scott Whittaker from Stone Pigman Walther Wittmann.
Exercise
PDF

During the session

Part 1: Knowledge Check

Ask attendees these questions to ensure they understand the topic:

What impact does the definition of loss have on a seller’s indemnification obligations for breaches of reps, warranties, and covenants?
What type of definition does a buyer want, and what type does a seller want?
What does “diminution of value” refer to, and how could it affect a buyer’s recovery for a successful indemnification claim?
What impact does rep and warranty insurance have on the need to define “Loss”?

Part 2: Group Exercise

Lead a group discussion based on the exercise above. To encourage collaboration, divide the attendees into groups to discuss the exercise, then have a representative from each group summarize their views to the larger group. Call on people to share their thoughts and ask others to respond.

Tip for remote sessions: use your web conferencing system’s breakout room feature to divide people into groups.

Part 3: War Stories and Firm Specifics

Share your own experiences and guidance, including:

Anecdotes and war stories (e.g., about a near-disaster or a tough negotiation)
General practice tips (dos and don’ts)
Firm-specific guidance and practices

After the session

To continue their learning, attendees can check out related courses in Hotshot's M&A Provisions topic.

About Hotshot

Hotshot helps lawyers develop their legal, business, and technology skills through short videos, quizzes, and summaries, and we help law firms and law schools plan and deliver engaging training programs. Our customers include Am Law 200 firms, top law schools, and regional and international firms.