Working capital as a purchase price adjustment tool *

Canada - July 17 2012
Working capital adjustments were originally designed to ensure that enough cash remains in an acquired business to allow it to operate in the ordinary course post-closing without requiring a capital infusion by the new parent or shareholder(s), or to compensate the purchaser or vendor in the event that there is too little or too much cash, respectively, in comparison with what is needed to support the business' ordinary course operations.

To bind or not to bind: a recent case on a binding letter of intent *

Canada - May 1 2009
When acquiring a privately held company, purchasers will often enter into the term sheet or letter of intent (LOI) without involving their legal counsel.