CARES Act Will Affect Earnouts, Purchase Price Adjustments

Attorneys Josh Gutter, Alan Schwartz and Sean Tevel co-authored an article published in Law360 discussing how the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) will affect the mergers and acquisitions (M&A) field. In particular, they focus on the CARES Act's implications for earnouts and purchase price adjustments. The authors discuss how the Paycheck Protection Program will affect the definitions of terms like net working capital used in transaction documents, FICA deferrals, other tax changes under the act and the increased importance of quality of earnings reports.

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