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BMK Business Matters

Let The Seller Beware

Selling Business Assets

Caveat emptor may be a familiar warning, but caveat venditor should be your watchwords if your business is in talks to sell valuable assets.

A case decided in federal court in Camden, NJ[1] highlights why companies for sale must exercise extreme care in disclosing valuable confidential business information, trade secrets and other intellectual property assets when dealing with potential buyers.

J&J Snack Foods Corp. claimed that Ruiz Food Products, Inc., a competitor of one of its product lines, approached J&J about selling its Patio® brand of frozen foods. After the two companies entered into a confidentiality agreement and a letter of intent, J&J alleges it shared detailed proprietary and confidential information, including ingredient specifications, product formulas, financial data, customer information, and vendor lists. After the initial asset purchase agreement was reviewed and a revised draft suggested, the deal came to an abrupt halt. J&J claims that Ruiz simply informed it that the deal “would not move forward” – offering no “meaningful explanation.”Read More

Jul 19, 2016

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