Gary Herschman, Member of the Firm, co-presents “Pitfalls of Letters of Intent: What You Need to Know Before Signing” with Dana Jacoby, President and CEO of Vector Medical Group.
All too often, physician groups and other health care entities sign letters of intent (LOIs) for major transactions without first getting input from professional advisors, such as attorneys, accountants, etc.
Most LOIs include legally binding exclusivity (or “no-shop”) clauses, which prevent the company from entertaining discussions and offers from other potential buyers and partners for lengthy periods of time (especially if the clauses include automatic extensions or renewals).
Further, although the key terms of LOIs may sound “nonbinding,” it’s common for buyers to resist making changes to such terms, claiming that they reflect “the constitution” of a deal. Also, transaction terms that are important to physicians may be left out—such as escrow amounts (which reduce cash paid at closing), allocation of liabilities, and restrictive covenants—which would then be negotiated later (and potentially could be “deal killers”), after expending substantial physician and staff time and legal fees.
This webinar will explain the key terms of LOIs, what terms should be included in LOIs, and why it is crucial to carefully negotiate the terms of more detailed, “long-form” LOIs with input from advisors before signing.
Once an LOI is signed, you will be committing substantial time and incurring significant costs in both (i) responding to very broad comprehensive due diligence requests on your practice’s or company’s financial, operational, and legal matters, and (ii) reviewing and negotiating lengthy and complicated transaction agreements.
- The key terms of LOIs
- What terms should be included in LOIs
- Why it is crucial to carefully negotiate the terms of more detailed LOIs with input from advisors before signing
Access the Recording
If you have any questions, please reach out to Kristen Vetula.
Members of the media, please contact Piper Hall.