It's exactly what I expected, someone didn't close the deal as stated and Nash went around them. Now they are mad for time involved on vetting the information. I would almost bet Nash won't settle due to an agreement clause of the mediating company missing a closing date.
Minervaworks (MW) was named first as a defendant, so this was likely an issue before XALL acquired them – I think I read; v. Minervaworks et al. XALL was added simply because of the acquisition and for a position of strength by the plaintiff (XALL public company image and its simple ability to make it go away). In any case, it will be taken care of by either fighting or negotiating a settlement. IT'S NOT A LARGE AMOUNT OF MONEY. We need to relax. This isn’t even a small issue in the scheme of things.
This looks like a pre-closing issue with MW. Buyers and Sellers have reps and warranties in the asset or stock purchase agreement. In this case, MW has to handle this suit as a practical matter, which will likely include XALL to some extent. Still not a concern.
Reeper, you are one of the most articulate and valuable posters on Ihub and I look to you for a lot of guidance and YOU ARE THE BEST. However, in the M&A world, there isn't a missed closing date. You have a 6-12 month listing agreement and even if you bring a buyer on the last day of the listing expiration, you still get paid even if it closes a year from now (kind of like a real estate broker). Sometimes there is a tail meaning the agreement eventually expires but generally speaking - a buyer introduced within the listing agreement means you get paid even if it's years later.
Below are my thoughts (as a 25-year M&A broker). First, lawsuits are commonplace and NOT a big concern especially over $187,500. They are usually settled out of court or dismissed. This still takes time, but again this isn't something to worry about.
Scenarios:
1. Minervaworks was possibly under an engagement agreement to sell its business. Unlikely, but possible.
2. Engaged to provide a business valuation and agreement had a clause that stated they had to utilize the firm to market the business. Unlikely too but feasible. Not sure I have seen this before.
3. XALL signed a CA / NDA to look at MW marketed by Ascento Capital – CA / NDA had a clause that they couldn’t close without notice to Ascento Capital and the deal was subsequently closed. Unlikely. Basically a non-circumvention clause.
To that end, there isn’t any degree of concern here. Just a small complaint. This doesn’t pose a problem for where XALL is going. All is good and this week will thrive. Everything is beyond excellent and we will stay strong!
