Economic volatility and M&A litigation go hand in hand. Here are tips on how to ensure the deal stays closed
THE INK IS DRY, the closing party’s over, the seller’s cashing the cheque and the buyer’s got his prize. Everybody's happy—or are they? It is becoming apparent that more of The Canadian dealscape - comprising 2,500 to 3,000 transactions per year - is mired in post - closing litigation.
Our situation is nothing compared to the United States, which saw some 96 per cent of deals struck post-2008 accompanied by litigation. Canadian dealmakers take note: pre-financial crisis, the Americans were at 53 per cent—still high compared to here, of course, but the meteoric post-crisis rise drives home that when economic times are tough, deal litigation spikes. And that’s a trend from which the less litigious Canadian market is not immune.