Representations and Warranties Insurance in M&A Transactions¶
Griffith, S. J. (2017). Representations and Warranties Insurance in M&A Transactions. Harvard Law School Forum on Corporate Governance.
Cited by¶
1 citation across 1 artifact.
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Primes¶
- Inherited-Substrate Risk
- Law and regulation: jurisdictions that copy statutes inherit the loopholes, ambiguities, and interpretive assumptions of the source, importing the source's exception-handling expectations without its enforcement context. Mergers and acquisitions: the acquirer inherits litigation, regulatory exposure, cultural debt, pension liabilities, and environmental-remediation obligations; due diligence is structurally an inherited-substrate-risk audit, and reps-and-warranties insurance exists because the channel is wider than diligence surfaces.
This sourceExplains that even rigorous due diligence leaves unknown liabilities and that reps-and-warranties insurance exists to shift the risk of breaches diligence does not surface — i.e., due diligence functions as an inherited-liability audit whose channel is wider than diligence reaches.
Supported in partVerified against the work's full text
Explains buy-side RWI and its exclusions, including that known diligence findings are uncovered; it does not catalogue the liabilities an acquirer inherits.
“the buyer in an M&A transaction recovers directly from an insurer for losses arising from certain breaches of the seller”
- Law and regulation: jurisdictions that copy statutes inherit the loopholes, ambiguities, and interpretive assumptions of the source, importing the source's exception-handling expectations without its enforcement context. Mergers and acquisitions: the acquirer inherits litigation, regulatory exposure, cultural debt, pension liabilities, and environmental-remediation obligations; due diligence is structurally an inherited-substrate-risk audit, and reps-and-warranties insurance exists because the channel is wider than diligence surfaces.
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