Chubb Offers Key Questions To Ponder In M&A Transactions

Chubb Group of Insurance Companies href=http://www2.propertyandcasualty.com/storefronts/chubb.html><%=company%> has published a list of key questions that companies and their insurance advisors should ponder to ensure that they are adequately protected against the risks involved in mergers and acquisitions.

Last year alone, merger and acquisition activity amounted to $1 trillion and this trend shows no signs of abating. Chubb offers specialized insurance products designed to help manage the financial risk associated with these transactions.

The key questions are:

1.What would happen if the company you purchase is unable to live up to its obligations under its buy/sell agreement?

2.Can you envision a situation where an undiscovered liability could compromise a prior financial arrangement?

3.After the close of a transaction, what would happen if you learned that a representation or warranty (such as fair representation of financial information) made as part of the agreement may have been breached? What might the financial implications be?

4.Are your personal assets at stake in an M&A deal you might undertake?

5.Does the life span of your product extend beyond the tenure of your ownership of the company as the manufacturer or distributor?

6.What would you do if your company were sued because of an accident caused by a discontinued product?

7.If you sell a company or product line, what liabilities might you continue to face?

8.Could a deal be compromised because of inadequate documentation of patents or trademarks? Is it feasible for you to re-evaluate all of your previous corporate sale and acquisition agreements?