Galvez Pascual partners Josep Galvez and David Martinez have obtained a relevant judgement representing the purchasers in a dispute following a multimillion company acquisition in Spain. In the decision, the Valencia Civil Court Nº 4 judge has accepted the allegations by the claimants who purchased a well-known and almost centenary freight forwarder and logistics company.
The claimants sought compensation for damages arising from the existence of relevant contingencies that the sellers had concealed at the time of the company acquisition, which did not become apparent until more than a year after the transaction. These severe deficiencies hidden by the sellers resulted in the loss of specific permits issued by the Spanish customs authorities, making the acquired company useless for the buyers’ interests.
The judgement examined the transaction in detail and confirmed that the sellers intentionally breached representations and warranties regarding administrative licences and authorisations necessary for the company activity. Furthermore, the claimants’ expert confirmed that these severe contingencies were necessarily known to the sellers during the company’s due diligence process and that, despite this circumstance, they voluntarily failed to inform the buyers so that the buyers would not lower the purchase price or walk away from the contract.
Accordingly, the court finally agreed with the compensation method calculation alleged by the claimants’ expert for assessing the damages, considering the company value loss when losing the permits related to the purchase price paid by the purchasers. Interestingly, the judgment upholds the claim in full, ordering the sellers to pay substantial compensation to the purchasers, interests, and court costs.
This ruling demonstrates the importance of relying on experienced dispute resolution lawyers, particularly others different from the law firm initially involved in the transaction, to enable an objective case analysis and determine the best strategy when embarking on disputes involving company acquisitions. If you want to know more about corporate disputes or are interested in pursuing a post-closing M&A claim, please contact Josep Gálvez. He is a partner in the corporate litigation team based in Barcelona and London and is a specialist in this area.
Por David Martínez y Josep Gálvez
