Lane Quoted on Earnouts

Boston Partner Roger Lane was quoted in a July 9, 2013 Law360 article titled “Pain Now or Later? Thermo Fisher Tastes Earnout Bitters.” The article discusses how earnouts often result in infighting rather than bridging the gap between what sellers want and what buyers are willing to pay for unproven assets-something Thermo Fisher Scientific Inc. is finding out. Mr. Lane, a member of Foley’s Emerging Technologies Industry Team, was quoted saying, “Most buyers are reluctant to make guarantees about budgets or staffing levels. Often a seller’s best hope is a negative covenant, where the buyer promises not to do anything to undermine the seller’s efforts.” Mr. Lane also stated, “You can’t anticipate everything. You handicap the deal the best you can, and you live with it … especially when the alternative is that there is no deal.” But “at the end of the day, terms like that mean different things to different people, in light of circumstances that may have changed,” Mr. Lane said. “That’s most often what the litigation comes down to – interpreting the terms you spend all that time hammering out.”