S5 EP4 | Closing with confidence: Resolving disputes and avoiding M&A litigation

Understanding what can lead to post-closing disputes is crucial, as no one likes to see a deal go sour after months of hard work. In this episode of Disputed, hosts Ted Brook and Erin Brown dive into the complexities of post-closing disputes, uncovering how and why deals can go awry even after months of preparation.

Joining them are Vanessa Grant, a senior partner and M&A lawyer from our Toronto office, and Andrea Brewer, a corporate and commercial law expert with a focus on public mergers and acquisitions. Together, they examine the most common sources of disputes and critical areas to address to minimize the risk of litigation, including tax due diligence, earnout provisions, and other key considerations. This episode provides valuable insights into safeguarding the deal lifecycle and ensuring a seamless post-closing process

This episode is accredited 0.5 substantive hours in Ontario and 0.5 substantive hours in British Columbia. 

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[00:00:00] Ted Brook Welcome back to Disputed. I'm Ted Brook.

[00:00:04] Erin Brown And I'm Erin Brown. Today we are talking about deals gone bad post closing disputes, arbitration and litigation in the private M&A context.

[00:00:12] Ted Brook From earned buyouts to working capital adjustments to tax controversies and disagreements over reps and warranties. There are many different ways, as Erin and I know, for a dispute to rain on your parade. In the world of mergers and acquisitions. But instead of bringing in some of our fellow litigators to talk about their experiences handling M&A disputes, we wanted to help parties to figure out how to avoid them in the first place. So we've gone to the experts, the corporate lawyers at our firm who actually put these deals together.

[00:00:47] Erin Brown So today we are pleased to have Vanessa Grant and Andrea Breuer join us. Undisputed. Vanessa is a senior partner and M&A lawyer based in our Toronto office. And word on the street is that she's no stranger to podcasts and interviews. Andrea's practice, meanwhile, covers all aspects of corporate and commercial law with a special emphasis on public mergers and acquisitions and securities law and corporate governance. Andrea, Vanessa, welcome.

[00:01:12] Vanessa Grant Thanks so much. We're thrilled to be here. Also, a little terrified to be here with our litigation colleagues, all trying to get over it.

[00:01:19] Andrea Brewer Yeah, it's usually a dark day if we have to bring in our litigators on a corporate channel.

[00:01:24] Erin Brown It's not dark today, but Ted and I are. Ted and I are bright, bright and happy today. We are so no doom and gloom needed. So as you just alluded to, are M&A fantastic M&A groups within the firm handle a lot of M&A and transactional litigation. But from your business, M&A, transactional perspective, what do you think are some of the most common disputes or issues that you see?

[00:01:53] Vanessa Grant Most are common disputes in the issues, and I'll let Andrea take over some of this because we trade off conversations around disputes are simply around the money. But let's take a step back for a second and talk about kind of the arc of the transaction, if we could. The arc of the transaction is we all start with a letter of intent. We have a we're all very happy. We're going to do a deal. Then we get into the due diligence. And back to the dark analogy, it starts to get a little bit darker. When we get into the due diligence, then we move into the reps and warranty is a little darker there. And then we talk about really what the backend liability is going to look like. And so the disputes we tend to see, as you alluded to earlier, Aaron, do center around money, but they come at different points of the transaction and ultimately they're really disputes around two things. There are either disputes around drafting interpretation, what we thought we were saying versus what you thought, or secondly, how do we do that math?

[00:02:50] Erin Brown Most of our listeners are more used to hearing about litigation on the podcast than M&A and transactional work. So maybe can you tell us a little bit about kind of that first arc? Where does the deal start? What are the first stages and what are the issues and things to be aware of in those really early deal stages?

[00:03:09] Vanessa Grant Okay. Sorry to keep jumping in as being first, but I'm always about the letter of intent. So the letter of intent on this is really quite interesting. So if you're going to sell your company, there are a number of ways of doing it, one of which is you could have an auction process, you could get a bunch of offers, etc.. Or maybe you've identified absolutely the right buyer. Either way, we're absolutely going to start with some kind of letter of intent which just outlines the transaction. Interestingly, if you're running an auction process or other, you might get multiple letters of intent and you'll be negotiating them and you'll have a well-articulated process for dealing with those. But if you're dealing with one off, I've identified the right buyer. This is all good. We're going to negotiate a letter of intent. And the first issue we see on those is how binding is your letter of intent? Really interesting story. When we were doing one deal, the client was running multiple phases of a transaction, so they were going to sell maybe part of the assets. They're going to sell all the assets or maybe get a license. So they were negotiating multiple deals at the same time, but but not as part of a clear cut process. One ended up happening was we had one letter of intent concluded, but we had some conditions, precedent. We said, look, this might not be approved by the board, etc., etc., with another potential party to a transaction, they popped up and said, my goodness, guess what, we want to buy you. So we went silent on person party number one. We'll call them party number one. Party number two, we do a full deal. We announced the deal with party number two and party of one. Guess I am really angry. I'm going to sue you because I thought I had a deal with you on the letter of intent. And one of the things that save the letter of intent, many others, was the fact that we had said, listen, we're not sure if this deal is going to go ahead. This is going to be subject to board approval. So the key lesson on that one is be very clear about two things the governing law of your letter of intent, because some jurisdictions will say that is binding and you have an obligation in good faith to negotiate. And the second piece is be very clear about the steps or the hurdles that you are going to have to get over in order to get a deal done.

[00:05:20] Ted Brook Andrea, any anything else that you would add to that letter of intent? Non binding phase where the parties are supposed to be setting out their expectations, but they also want to set out some parameters and maybe get a couple of hooks. What tips or strategies do you have?

[00:05:35] Andrea Brewer Exactly. It is that fine line, right? Because the pros and cons of having a certain deal that's fully baked, you're happy with price, right? You know what that's going to look like versus maintaining some flexibility. And as Vanessa said, you can see the pros and cons of both of those sides. So I echo the same advice really, that before backing up even, let's talk about before even having the letters of intent or deciding on the auction process, as I. So I'm going to talk sell side now before even starting down that road, be really clear about what your goals are for the process. And as much you want to maintain as much flexibility as possible, of course, for things that are unforeseen. But if the goal is to sell the company at the highest price, for example, and that's a pretty common goal, let's be really clear about the governance, about how we're going to do that, how the process is going to be run, how we're going to communicate about that process to the bidder or more than one bidder who are involved in the process. And let's be really clear early on as to the hurdles of actually closing the deal. As Vanessa said, the board approval, shareholder approval, regulatory approval consents that are going to be required. And let's be realistic about the timeframe in which this is all going to happen so that we can manage this at every stage.

[00:06:54] Erin Brown So, Andrea, I suspect one of the next steps is probably negotiation and due diligence. Correct me if I'm wrong, but moving into that next step of the deal, what would be your steps at that stage?

[00:07:08] Andrea Brewer Yeah. So as part of that, thinking through the process start to finish as best as you can, when you have the luxury of time and sometimes you don't. So you do the best to the best that you can in the parameters that you're given. But we always recommend to our clients and again, South Side in particular, to get the house in order. And what I mean by that is don't ignore that ongoing piece of litigation that's been festering out there for months or years that no one really wants to deal with. Right. That's just hanging on. Basic stuff. Are your minute books and corporate records in good order and up to date and kept? Is your financial house in order? Tax returns, filings all of those things. Are you collecting and remitting taxes in the right provinces, in jurisdictions in which you're selling your product? These are all very basic things that can become a huge distraction pressure point during legal due diligence, rack up frankly, ridiculous costs sometimes right on both sides. When a buyer sort of looking under the hood and trying to get a sense of the company. So as a cleaner, the deal that you can present on the south side will just make the process go so much easier as you head into that due diligence process.

[00:08:27] Ted Brook So, Vanessa, obviously a big part of this second phase, negotiating the binding purchase agreement is reps warranties. Can you talk a little bit about disagreements that arise during that negotiation phase and how you help both buyers and sellers negotiate those conversations?

[00:08:47] Vanessa Grant my goodness. You have opened the proverbial can of worms. Yeah. Door. It's Ted. Thank you. Reps and warranties are actually very interesting conversation. What I usually say is they're interesting, but what's more relevant when we're having the conversation is two things. What happens if they're wrong? So what does the back end liability look like for breaches of those? And secondly, is there representation in warranty insurance to cover them? Many deals, if not all deals, now have some form of representation, and warranty insurance is usually on the buy side, but 99% are on buy side. That gives everybody the ability to breathe. To a very large extent. I want to talk about Brees. Like if I'm the seller, I get certainty of return because if something is incorrect, I have looked at the policy and hopefully it's covered by the policy and if there's an exclusion, we've been very thoughtful about how to negotiate for the back end liability around that exclusion. I'm going to pause there because that's number one. Rep and warranty insurance lets sellers breathe, also lets buyers breathe to a very large extent. Secondly, we care deeply about the disclosure against that rep and warranty insurance. So we care deeply about that disclosure because that's what the insurer is going to review and rely on in determining what gets covered under the insurance or not. If, again, though, regardless of whether or not there's representation, warranty insurance, we're going to be thoughtful about negotiating appropriate representations and warranties which represent an appropriate allocation of risk between the two parties. And we're going to be very thoughtful on both sides of the deal seller and buyer in reviewing and drafting those disclosure schedules which disclose exceptions or disclose additions to those representations and warranties.

[00:10:39] Erin Brown Do you think that there's any risk that the RWA insurance sometimes lets them breathe too much, i.e., are you seeing any trends or is there a risk that parties don't pay as much attention to either what they're actually putting in the in the agreement in terms of the reps and warranties or what they're putting in the disclosure schedules because they say, there's RWA insurance. Are you seeing a sloppiness around it?

[00:11:06] Vanessa Grant The answer to that is an unequivocal no. What an insurer insures on and what an insurer diligence is, the quality of the due diligence done by the parties. So there is, in fact a bigger incentive. Or if we're talking behavioral economics, there is a B, there is an incentive for both parties to provide the highest and best possible diligence in order to ensure that there is coverage. The insurer diligence is the diligence, doesn't diligence the company or the target diligence is the diligence. And if the insurer believes, for example, that the due diligence has not been as rigorous as they might expect, that will go to what the insurer is prepared to cover. So in fact, there is little I if you want to do on that. I think that insurance actually encourages and continues to encourage more thoughtful diligence reviews rather than less.

[00:12:02] Ted Brook Andrea, what are your thoughts on that, either on the types of kind of risks and issues that arise at the rep and warranty stage? Or if you have any thoughts on how the availability of insurance impacts the behavior of the parties?

[00:12:20] Andrea Brewer I concur with with businesses that in our experience you sometimes have those discussions among counsel. Just saying when we as lawyers are fighting back and forth about threats, which is where we spend a ton of the time in a negotiation of a purchase agreement, one party or the other will usually say, well, what? So what? We've got insurance for this, right? And we very quickly always answer that to say yes. But if there's something that's known now, if the parties all know that there is an issue, you're not going to get your insurance coverage for that. Right. We can't turn a blind eye to it. So I completely concur that the layering in of the insurer I'm sorry that rep and warranty insurance really just provides some comfort as to if there is a problem down the road, who is going to and how is that going to be allocated financially. Right. It provides some breathing room and coverage from that perspective. So it is a more comfortable situation, but it does in no way derogate from our job as lawyers or that the veracity that we with which review the reps and warranties.

[00:13:30] Erin Brown So at that sort of like a middle, if I could call it kind of the middle stage of the arc, you're negotiating reps and warranties or doing due diligence. Is there anything else that we should kind of unpack at this stage before we move to kind of that later arc of the deal?

[00:13:45] Vanessa Grant I think there are two pieces that I'll unpack here. One is where are the points of tension end up being or around definitions of materiality? So if I qualify representation and warranty by materiality, how are we going to interpret that? And it's an interesting contractual interpretation conversation. The second piece that we have is in the drafting of reps and warranties is knowledge. How is that knowledge qualifier drafted? Is it constructive knowledge? Is it actual knowledge? How are we defining knowledge? And in fact, that's where we see a lot of the conversation around negotiations. And ultimately that's where we see the conversation going when it heads over to you. Happy litigators.

[00:14:27] Ted Brook Andrea, I'm wondering if you could speak to how and whether you have any experience with either American or other foreign. Buyers and sellers come to grips with the fact that Canadian judges may interpret contracts a little differently than they see contracts interpreted back home.

[00:14:46] Andrea Brewer The jurisdictional and cross-border and multinational perspectives that we have to bring every day in dealing with our clients and negotiating a deal with parties from different backgrounds and also different expectations. We of course, have to always try to level set that candidly. Our clients are. Are not hoping to have to think about a judge interpreting the agreement that they're spending a lot of money to negotiate. Right. They usually don't want to turn their minds to that. So I can't say that we get into too much granularity. But the one point I wanted to pick up on what Vanessa was saying, people's eyes tend to glaze over when we get too much into materiality and material adverse effect or what we call maybe with the acronym. And in in our world, you only have to think about a practical example of that. Right? When Covid hit, there were deals in the throes of being negotiated, right? Like, what does that mean in the context of this one deal that you may have been in the middle of negotiating when the world has shifted on you? Right. And people were looking to renegotiate price, you know, get out of deals if needed. And what was the legal hook that would permit them to do that? We could go down the rabbit hole on maze and sort of the Covid things which we're now several years out of. But we still think about that, right? We still think about what if something happened, You know what what would that do to our deal mid-stream. So. So yeah, the super important topic that we spend a lot of time on is lawyers.

[00:16:16] Erin Brown Okay. Moving through the arc of the deal. So we're done negotiating. We've got a rep and warranty insurance. We close, but everybody's happy. But that's not always the end of the you know, or you you know, you finish the agree, you sign the agreement. But the deal isn't maybe even necessarily closed yet. What are kind of some of those late stage issues?

[00:16:38] Andrea Brewer So now we're really talking about what we call the interim period, right? So between signing the deal, signing the purchase agreement and closing and what's going to happen during that period, and that can be a matter of.

[00:16:52] Vanessa Grant Weeks.

[00:16:53] Andrea Brewer Right? Or that can be months and a very long time, depending on what we're waiting on. Or, as you say. Right. As you say, Erin, the regulatory process or framework that we've got to now go through to close the deal. So the agreement, again, will be very prescriptive as to what is supposed to happen during that interim period.

[00:17:14] Vanessa Grant In.

[00:17:14] Andrea Brewer What we call them, the interim covenants. So what are the promises? What is the seller going to do for the benefit of the buyer during that period? It should be business as usual. We obviously don't want any big intervening events to happen.

[00:17:29] Ted Brook How do you police the interim period, right where you have a party that's just essentially being a steward of an asset that was purchased by someone else?

[00:17:39] Andrea Brewer It's pretty normal course for most businesses, right? It's in the seller's interest to keep on calling a business as usual that that can mean a lot of things to a lot of different industries, parties. There's cyclical concerns right in the market. There's industry specific concerns, and then there's external intervening factors that nobody can control. But it's in the sellers interest to keep that business taking a long and running as good, maybe even better than it's been in the period leading up to the negotiation and the signing. But and it's in the buyers interest that happened, too. So so usually we see that as a pretty cooperative period. People are in general super happy there's a deal. Hopefully everyone's happy about price, but we definitely get concerned the longer that interim period goes on. Right. Which again brings us back to our first point about let's be really clear about the process and the timeline to get this deal to closing.

[00:18:41] Erin Brown I understand that there's a lot of the kind of calculations and earn outs and working capital adjustments. These issues crop up at this point. Tell us a little bit about kind of that aspect and whether there's how likely is there potential for dispute there and how to navigate that?

[00:19:00] Vanessa Grant Well, we haven't closed yet. We were right in the middle of sort of the interim period, but let's assume we've closed for a minute. So when we close, obviously that's when the buyer owns the business. The buyer has now started to run the business and the buyer has a real sense of what's going on. So the first piece we have is the first calculation post closing is typically the working capital adjustment. When we close a deal, we want to close a deal with with working with a company that's essentially debt free. Cash free is usually the way the closing works. And so we have to adjust. We don't know on the day of closing exactly what the numbers look like in the bank accounts. So we usually wait 90 days or some period of time thereafter to for all the bills to come in and for everything to be sorted out. And then we'll do that adjustment. And that's usually the first math problem. And the challenge with drafting all M&A agreements is making sure that the prose in the agreement matches the expectations on the math. And what we usually do is M&A lawyers is we try to say, listen, can we have a sample calculation put into here, into the document? Then we track the sample calculation against the drafting. But sadly, there is an imperfect match between prose and math. So no matter how well drafted, sometimes we have challenges.

[00:20:21] Ted Brook How often do you get other professionals involved to help make sure the math is on track?

[00:20:27] Vanessa Grant There is no deal I have done without someone who knows how to wield a calculator.

[00:20:32] Erin Brown Lawyers should never be responsible for the map agrees.

[00:20:38] Ted Brook It's important and I'm glad. I'm glad you framed it like that because it's a whole team that has to bring a deal over the line. And we talked about in terms of lawyers negotiating, but really this is so essential to have the accountants and other advisors involved.

[00:20:52] Vanessa Grant You're absolutely right. I mean, there are a lot of people who get invited to this particular party. And we as lawyers, along with everyone else on the team, are working towards ensuring that we have an agreement and an agreement that is articulated clearly cleanly with hopefully a minimum of. Ambiguity in the document. That's the goal. I want a simple document. I said simple footnote, everyone. Not simple. But I want a simple document that can be read by any one of those team members. And we all have the same view of it. And where the disputes arise is we didn't quite get there. Or to Andrea's point earlier, perhaps there's been something when we looked under the hood later on that wasn't exactly articulated or there was a surprise.

[00:21:49] Erin Brown I would imagine that when you had sort of a closely held company, there can be a lot of emotions wrapped up into that. Maybe there's some increased incentives for litigation there. Do you see any particular dynamics when you have a founder and how they're going to be involved in the company going forward? Are there any specific tips and tricks around kind of negotiating that piece of the puzzle?

[00:22:12] Andrea Brewer Yeah, that's a great question, which we haven't touched on at all, is really the sellers. Like we've been speaking in generalities, but there's human beings right behind these companies who are both buying and selling and on the selling side. And we deal with a range of sellers. We deal with very sophisticated corporate entities that are selling off a subsidiary. Right. And I mean, it's very that's a very different deal than found a founder or founders, a group and maybe some friends and family that have over the years funded that business. Right. Coming together and making a decision for the business. I mean, we haven't even touched upon the types of disputes that can happen even among the selling group. Right. As to valuation, do they even want to sell? Are we going to have to drag them along? I mean, there's that whole other side of this that is very much part of the deal. And again, the great question then I think takes us back to that very first thing about let's think about the process we're running. Do we have everyone on board with this process, everyone who needs to be on board on the selling side? So hopefully you get there. But managing all of the and it can be very emotional for founders for sure. For people who have built a company over many years or sometimes a lifetime. Right. And exiting that or doing succession planning for that business and releasing the reins of control, that can be a really, really tough, tough situation. And that's not legal. That's actually just human psychology. Right. And managing the personalities and the emotions, as you say, around that. And so I think our job as lawyers. Right. Is helping to manage those expectations.

[00:23:55] Ted Brook When there is uncertainty or maybe about the future performance of a company when there's disagreements over the price. Earn outs are a tool for kind of bridging that gap. For our listeners, what is an earn out in a sentence or two and why does it work? What are the risks? A build in earn out to a deal.

[00:24:15] Vanessa Grant And earn it is simply put. It's an additional payment on the purchase price for achieving certain performance targets. And you're absolutely right, Ted. What that goes to is we, as the seller, for example, believe that the company is worth X plus Y. The buyer says, Gosh, I'm not sure your financial statements would support X plus Y, but I'll give you X and then later on I'll give you Y over time. If what you are telling me about future performance proves accurate, the challenge on earn outs, very simply put, is once the seller has sold the business, they have no control over it. And one of the things that we discuss and sadly there's no perfect answer for this, is how do you actually control the achievement of those targets when you are not running the railroad anymore? You're still maybe in the business, but you don't have as much control over decision making. So that's the first issue that we deal with and that's there's never a perfect solution for that. The second issue is, of course, how did we calculate the earnout? Is it based on performance? Is it based on revenue? Is it based on number of contracts? What is the mathematical mix that goes into determining how that or debt is calculated? And as my accounting colleagues will tell me more than once, Vanessa, math is not so much science as it is art. And I acknowledge that they may well be right. So that having been said, the second piece on earn outs is have we actually, to the extent that we can and to the extent that we have that crystal ball for the future, have we articulated how that's going to be calculated with some degree of certainty? The answer is we try. But I my crystal ball is currently not functioning and I am not winning lotteries.

[00:26:12] Ted Brook Andrea, what are your recommendations? If a client is contemplating or whether it's a seller or a buyer, what would you say is something that needs to be kept in mind?

[00:26:21] Andrea Brewer I echo the guidance that Vanessa gave, and again, being as granular around that, the more precise those milestones are and those metrics that's going to set them up for success. And an earn out can be a really nice sweetener, right? It can be a really nice incentive. And especially if there is a legacy management team sticking around. Right. And if that management team hopefully also has their own incentive plan to help drive performance and keep that ball rolling. Right Post-closing. That can be a really theoretically great way to sort of extract more value for the sellers and make the buyers feel more comfortable that they're only paying what something is worth when it's proven to be so. I mean, you can't talk about earnings without also talking about hold backs, which is sort of the opposite. The buyer saying, okay, you think it's worth X plus Y? I'm going to I'm going to give you X plus something, but we're going to put some of Y in escrow because I'm concerned about that litigation we talked about that's been ticking along. I'm not sure how you're going to settle that. There was some environmental due diligence. Were a little concerned that maybe you haven't been doing everything right. The bottom line is there is going to be money that's going to be parked in a neutral third party escrow agent, and it's yet another agreement that we have to negotiate as part of the deal. And it's, again, going to be very clear and hopefully very granular as to when that escrow money, when or if that escrow money will be given to the sellers as. Okay, great. The litigation got settled super quickly. That environmental thing we were worried about would never have transpired. That tax issue we raised was actually not a real issue or we're comfortable now. The buyers and sellers agree. We're going to give you your escrowed money. And so seller is now closer to the X plus Y that they wanted. Or if things don't go as planned, that Y money is going to go right back to the buyer. Right? If if, if some of the concerns that the buyer had do indeed materialize. So so again, we come back to the topic of the discussion today. Where do we see disputes? And I'm using that term generally to just mean friction and pain points post the deal that both the R.A., if there is one and there isn't always one, but the hold back or the escrowed funds, I mean, that's where there can be friction. And again, our job is to draft that as crisply as possible so that there's hopefully less risk around it.

[00:28:55] Erin Brown So let's move out of the sort of arc of the deal and pull some of these threads together for our listeners. So what do you see as some of the general pain points and friction that can sour those post-closing relationships and taint the deal so that we so that they can be avoided?

[00:29:13] Vanessa Grant If we're talking about just a general set of principles, what I call the p t p principle, p, t P stands for prepared and process. T stands for transparency. And the other P stands for personality. I don't want to lose the thread that Andrea started, which is there are people behind this transaction. And so we've talked about being prepared. We've talked about having a good process. So that's our first piece. The second is transparency. Business moves at the speed of trust. And so that transparency involves creating that trust relationship, being as transparent as possible, obviously, without without leaving things on the table. This is a negotiation, after all. And the last is the personnel. There are people behind every transaction, regardless of whether or not it's a large transaction, large and sophisticated, or whether it's a founder selling the business. And in order to avoid friction and pain points, if we follow the P2P principle, we get there.

[00:30:20] Ted Brook I like that. And Andrea, what are your thoughts?

[00:30:25] Andrea Brewer Well as council, it's always disappointing, like our job as M&A lawyers, right? It's not supposed to be an adversarial process when we're working on a deal. You know, certainly there's advocacy, right? We are absolutely advocates for our clients and we want them to be represented properly and get the best transaction with, you know, the less risk and all of that good stuff. But it's always disappointing when I think counsel descends into the fray, if I can put it that way. We really should be trying to keep clear heads and to be truly the collaborative people to get the deal done. If there is a deal to be done and sometimes the deal falls apart and that's okay too. Right. We haven't really talked about that much, but I don't think we're not doing anyone a service if we're trying to do a deal at all costs. There are reasons that deals fall apart, and that's totally fine, Right? And sometimes necessary. So I think just being an advocate for our clients, but not being overly adversarial. Right. It's the deal is usually tough enough as it is that it's always a pleasure when you're dealing with counsel that you can work with cooperatively and collaboratively. And I think that really helps set the tone.

[00:31:42] Vanessa Grant To.

[00:31:43] Ted Brook Setting the tone. Being an advocate, but not an adversary. TTP, these are all great steps. And in many ways they kind of apply to litigation. Like this sounds sounds odd, but, but, but these principles, like it's obviously we when, when, when the file ends up on our side of the firm it it is an adversarial process. But as lawyers we're advocates for our clients. We ought to identify the issues. We have to cooperate to figure out what is actually going to be determined by the arbitrator.

[00:32:15] Erin Brown And you can't proceed at all costs sometimes. Same with the transaction. Sometimes a dispute is just not worth pursuing. And our best advice that we can provide to a client is this really isn't worth taking forward.

[00:32:26] Ted Brook With, which is the flip side sometimes our best as well. You know what? You should really go reach a deal and that's sometimes, you know, an era and you're saying, well, you know, you really shouldn't reach a deal. But I like that. I like that when things come full circle. Any other last minute advice that either of you have, finesse or. Andrea, for in-house counsel? Right away, I want to talk about maybe the GCS rather than the owner operators or the founders. Any advice for in-house counsel who's going through a private M&A process that you would want them to keep in mind, specifically from the perspective of avoiding disputes and potential litigation?

[00:33:08] Vanessa Grant I'm a big fan of the AP approach, that transparency, that trust. But most importantly, we've got each other's backs. I got your back. That's the way it works. And the great part about in House counsel is they're playing inside ball and they know way more about the business than I ever will. And so I've got your back.

[00:33:29] Erin Brown I love that. Andrea, any tense I can take away is.

[00:33:33] Andrea Brewer I agree with that entirely. I mean, the one thing we didn't talk about and this is not a neat sort of five second wrap up, but is thinking about actually the dispute resolution process and where you if things go wrong, where do you want to fight that fight, if I can put it that way, Sometimes we all know this is a place where we usually involve you guys to take a look at the agreement. Right. Do we want to be in court? Do we want to be arbitrating mediating? How do we want that to go? So I would just say we didn't touch on that. And again, that could be the subject of its own podcast for sure. The different ways that can go. So I would just say the dispute process, dispute resolution, process generally think through that when times are good, as always, so that hopefully if something does present your real clear on how that how that railroad is going to run.

[00:34:23] Ted Brook Excellent. Well, thank you, Andrea. Thank you, Vanessa. This has been a great conversation.

[00:34:35] Erin Brown That was a super fascinating episode. I learned so much from the lesson, Andrea, And what I thought was interesting was we in normally we talk about handling disputes, and really what we talked about on this episode was how to avoid disputes.

[00:34:50] Ted Brook They brought a great perspective, different way of thinking about these problems and really thinking down the line, right? How do we mitigate that risk before it's even on the horizon? So I learned a lot from us.

[00:35:01] Erin Brown Yeah. And I think it's, again, a lot of those themes of be transparent preparedness is, as you so accurately called out, a theme that carries over to the litigation context as well. And really that kind of like practical problem solving, openness, building trust between the parties. I thought those were all some really interesting, really interesting themes. Yeah. I hope our listeners learned as much as I did.

[00:35:25] Ted Brook So for everyone listening, I hope you enjoyed and don't forget to follow us wherever you get your podcasts and we'll see you next time.