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ePaper created 2015-05-28, 18:34:54 | version 1.33.0
ASSET SALES SPV SALES WARRANTIES The Buyer relies mainly on the appropriate searches, pre-contract enquiries and due diligence reports or certificates on title. The Buyer can rely (to the extent that they are not excluded in the transaction documents) on the standard contract provisions produced by the Law Society. Fewer warranties are required because not all liabilities are automatically transferred. Warranties provide a form of retrospective price adjustment if any of the warranties turn out to be untrue. The protection they provide will usually be limited in duration and subject to a financial cap and other contractual limitations. Acquiring a company involves greater risk as the change of ownership of the company will not affect its obligations, liabilities or rights (save where there are change of control provisions). Warranties allow a Buyer to extract information about the true value of the SPV and obtain some form of redress if any warranted statements prove to be untrue. CONTROLS BETWEEN EXCHANGE OF CONTRACT AND COMPLETION There is usually a gap between exchange and completion and additional searches are carried out in this period. A buyer of investment property will usually insert carefully set out control provisions to give them control during this period. Simultaneous exchange and completion eliminates transaction risk during the intervening period. If there is a delay, additional drafting is required to cover matters that might arise in the intervening period. Conditions precedent may also be required. INSURANCE Usually, the Buyer will insure the property from exchange. The SPV’s insurance policies will remain in place, unless otherwise agreed. CONTRACTS Any contracts which the Buyer requires need to be specifically assigned. Any third party consents required need to be considered. Contracts to which the SPV is a party do not need to be assigned, unless they contain change of control provisions. 6 pg lore summer 2015