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 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