Latest / The Acquisition Talk with Fexingo: Mergers, Buyouts, and Business Sales for Operators
The M&A Signing Fee Trap That Buried a $40 Million Deal
When a private equity firm agreed to acquire a family-owned industrial parts distributor for $40 million, the signing fee seemed like a harmless gesture of good faith. But the fee's structure triggered an unexpected tax liability that cost the sellers nearly $2 million and nearly cratered the entire transaction. In this episode, Lucas and Luna dissect how a poorly structured signing fee can become a hidden bomb in M&A deals. They walk through the specific mechanics of the case — including how the fee was classified as a prepayment rather than a deposit, the IRS treatment that shocked the…
The skinny
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