You have signed a Letter of Intent. The clock is running — exclusivity windows in healthcare practice M&A typically span 60 to 90 days, during which the buyer's legal and diligence machinery begins operating at full speed. The attorney you hire in the next 72 hours will either protect the deal you negotiated or quietly allow it to erode. Most practice sellers make the mistake of hiring a generalist attorney they already know — their business lawyer, their estate attorney, their litigation counsel — rather than a specialist who understands healthcare regulatory law, APA mechanics, lease assignments, state licensure requirements, and healthcare-specific representations and warranties. This guide gives you the framework to interview attorneys correctly, the questions to ask, and the signals that tell you whether you are speaking with a healthcare M&A specialist or a well-meaning generalist who will slow your deal and cost you money.
Under LOI, the definitive documentation phase — drafting and negotiating the Asset Purchase Agreement (APA) or Stock Purchase Agreement (SPA), disclosure schedules, employment agreements, restrictive covenant structures, transition services agreements, and any real estate addenda — is where the economics you negotiated in your LOI are either preserved or surrendered. An attorney who does not know standard healthcare M&A representations and warranties may agree to language that is both overly broad and uncommon in the market, exposing you to clawbacks, indemnity claims, and post-closing liability that dwarf their legal fees. The wrong attorney does not just cost you billable hours — they can cost you a material percentage of your purchase price. Note that the structure matters enormously here: in a stock sale, the seller's representations cover the entire legal and financial history of the entity being sold — not just disclosed assets — creating a materially higher liability standard than an asset sale. Most small-to-midmarket healthcare practice transactions are structured as asset sales precisely to limit this exposure, but if your deal is structured as a stock sale, your attorney's protective posture on representations must be correspondingly more aggressive.
Healthcare transactions carry a dimension of complexity absent from most commercial M&A. Medicare and Medicaid provider enrollment continuity, state licensure change-of-ownership (CHOW) requirements, HIPAA-compliant patient records transfer, lease assignment with healthcare-specific landlord dynamics, employment agreement continuity for licensed clinical staff, state CON laws, and Stark Law / Anti-Kickback Statute compliance must all be navigated concurrently with the standard purchase agreement mechanics. A generalist M&A attorney who has never transacted in healthcare will encounter each of these issues for the first time on your deal — and you will pay for their learning curve at $400–$650 per hour. The stakes warrant a specialist.
The distinction between a generalist M&A attorney and a healthcare M&A specialist is not merely about subspecialty marketing — it has direct consequences for deal speed, risk exposure, and outcome. The table below outlines the material differences. Ask the attorney about each dimension directly during your interview.
| Dimension | Healthcare M&A Specialist | Generalist M&A Attorney |
|---|---|---|
| Lease Assignment | Reviews existing lease terms for assignment restrictions and landlord consent requirements; negotiates landlord consent as a closing condition. If the seller owns the building, leads negotiation of a new landlord-tenant lease — covering term, rent, escalation, and use provisions — as a separate workstream running in parallel with the APA. | May treat lease assignment as a ministerial step — failing to identify landlord consent requirements, assignment fees, or personal guarantee burn-off provisions. If the seller owns the building, may not recognize that a new lease negotiation is an entirely separate legal workstream requiring dedicated attention and, in complex cases, real estate counsel. |
| Medicare / Medicaid Enrollment | Navigates CMS Form 855B (change of ownership) requirements, TIN changes, and the risk of billing gaps or clawback exposure during enrollment transition. | Unfamiliar with CMS enrollment mechanics; may not flag the 30–90 day enrollment gap risk or know to structure the transaction to preserve the seller's existing provider numbers through a specific closing date. |
| State Licensure CHOW | Knows which states require pre-approval versus post-closing notification for change-of-ownership, and structures the closing timeline accordingly to avoid operating without valid licensure. | May not identify state-specific CHOW requirements until raised by buyer's counsel — causing unexpected delays and regulatory exposure. |
| Stark Law / Anti-Kickback | Structures physician and non-physician owner compensation arrangements (including post-closing employment or consulting agreements) to comply with applicable Stark Law exceptions and AKS safe harbors. | May know that Stark Law exists but lacks the transactional experience to structure around it — creating unintentional regulatory risk in post-closing arrangements. |
| HIPAA Records Transfer | Knows the requirements for transferring protected health information (PHI) in a business associate or change-of-ownership context; structures patient notification obligations correctly. | May treat patient records as generic business records — failing to recognize HIPAA obligations that attach specifically to PHI in a transaction context. |
| APA Representations — Healthcare-Specific | Negotiates healthcare-specific rep and warranty language covering billing compliance, OIG exclusion list checks, no-debarment certifications, and provider credentialing continuity. | Focuses on standard commercial representations; may miss or accept overly broad healthcare-specific reps that expose the seller to post-closing clawback claims for pre-closing billing irregularities. |
| §1060 Purchase Price Allocation | Advises seller on how to negotiate the §1060 allocation to maximize LTCG treatment (e.g., goodwill/going concern) versus ordinary income items (e.g., covenant not to compete, equipment). | May defer entirely to the seller's CPA — missing that the APA allocation language creates the binding tax framework and that legal and tax counsel must work in concert during drafting. |
| Non-Compete Enforceability | Knows state-by-state enforceability standards for restrictive covenants in M&A (distinct from employment), negotiates scope, geography, and duration to protect the seller's ability to re-enter the market post-restriction. | May apply employment non-compete standards to the M&A context — missing that courts generally enforce M&A non-competes more aggressively, warranting tighter negotiation on scope from day one. |
| Closing Timeline Management | Understands the sequencing of regulatory approvals, CHOW licensing submissions, and landlord consent timelines in parallel with APA drafting — managing a realistic closing schedule that accounts for regulatory lead times. | Focuses on document drafting; may underestimate regulatory lead times and allow the exclusivity window to expire before closing is achievable. |
Conduct these interviews by phone or video before making any engagement decision. Allow 30–45 minutes per attorney. Tell each attorney at the outset that you are speaking with multiple candidates and will make a decision within 48 hours — this signals sophistication, sets expectations, and accelerates their responsiveness. The questions below are organized by category. For each, we tell you what to ask, what a strong answer looks like, and what responses should give you pause.
This question forces specificity. "I do M&A work" is not the same as "I have closed 12 healthcare practice transactions as seller's counsel in the last 36 months." The follow-up on practice type — physical therapy, behavioral health, primary care, dental, multi-specialty — tells you whether they understand your specific regulatory and payor environment. PT and behavioral health, for example, have materially different payor mix dynamics, credentialing requirements, and CON exposures.
Real estate is one of the most consistently underestimated closing risks in healthcare practice M&A — and it presents differently depending on whether you lease or own your space. Healthcare practices are locked to a specific licensed location; the buyer must have valid, continuous occupancy rights at closing or the deal has a critical operational gap. If you are a tenant, that means lease assignment. If you own the building, that means negotiating a new lease between you as landlord and the buyer as incoming tenant — a fundamentally different dynamic with its own complexity. Both scenarios require careful legal management; neither should be treated as a formality.
This is a technical litmus test. A healthcare M&A specialist will have strong, specific opinions on rep and warranty negotiation — because they see the same overreaches in buyer-drafted APAs repeatedly. The answer tells you both how experienced they are and how aggressive they will be on your behalf. A seller's attorney who is not prepared to fight the first draft of the APA is not serving your interests.
The §1060 asset purchase price allocation is one of the most consequential tax provisions in an asset sale — and it is determined in the APA, not separately. The allocation determines whether your proceeds are taxed at long-term capital gains rates (~20%) or ordinary income rates (up to 37%). A seller-favorable allocation maximizes the proportion allocated to Class VII (goodwill / going concern) — LTCG treatment — and minimizes allocations to Class V (equipment — ordinary income via depreciation recapture) and Class VI (covenants not to compete — ordinary income). An attorney who treats this as the CPA's problem and negotiates the APA independently is leaving after-tax proceeds on the table.
State licensure change-of-ownership (CHOW) requirements vary dramatically — some states require pre-approval before closing can occur (meaning the deal cannot close until the state grants a new license), while others require post-closing notification only. In states with pre-approval requirements, the regulatory timeline — often 30 to 120 days — must be built into the exclusivity window and closing schedule from day one. An attorney who does not know your state's requirements cannot give you an accurate closing timeline or structure the transaction correctly.
Non-compete covenants in M&A transactions are treated differently from employment non-competes across virtually every jurisdiction — courts apply higher enforceability standards because the restriction is tied to the sale of goodwill. Buyers know this and will push for broad geographic scope (often county or statewide), long duration (3–5 years is market standard; anything beyond 5 years is atypical and generally difficult to enforce), and expansive definitions of restricted activity. If you plan to remain in the healthcare industry in any capacity, the non-compete provisions directly constrain your post-close options. A specialist negotiates these provisions surgically; a generalist often accepts the buyer's first draft.
Escrow holdbacks — portions of the purchase price held in escrow for 12–24 months post-close to fund indemnification claims — represent real, deferred liquidity for the seller. Buyers will propose holdbacks ranging from 5% to 15% of purchase price; the market norm in small-to-midmarket healthcare M&A is typically 5%–10%, held for 12–18 months. An attorney experienced in healthcare M&A will know these benchmarks and fight for the low end. Earnout provisions — if present — are where sellers most commonly lose money: vague measurement metrics, buyer control over the business post-close, and inadequate accounting protections all create earnout structures the buyer can manage to minimize payout.
This question surfaces two critical risks: the bait-and-switch (partner sells the engagement, associate works the deal) and bandwidth constraints (attorney is overcommitted and your deal gets deprioritized). In a 75-day exclusivity window, response times and drafting speed matter enormously. You need to know exactly who is working your deal, their experience level, and whether they have capacity. Fee structure matters too — hourly versus flat-fee arrangements carry different incentive structures, and you should understand total estimated cost before engaging.
Experienced seller's counsel conducts a pre-closing legal audit — identifying potential disclosure issues before the buyer does, so they can be addressed proactively or disclosed accurately in the APA's disclosure schedules. Issues surfaced during buyer due diligence become negotiating leverage for the buyer; issues voluntarily disclosed early by the seller are managed on the seller's terms. This question tells you whether the attorney is proactive or reactive, and whether they understand the strategic value of seller-side diligence preparation.
References are a standard professional diligence step that surprisingly few sellers pursue when hiring legal counsel. A healthcare M&A specialist with genuine volume will have multiple satisfied seller clients who can speak to their experience — deal speed, advocacy quality, communication style, fee accuracy. Refusal to provide references, or references who cannot speak to healthcare M&A experience specifically, should be treated as a disqualifying signal.
In addition to the specific question responses above, watch for these broader behavioral and communication signals across the entire interview.
Your M&A investment banker and your attorney serve distinct but complementary functions — and the best transactions run when these two advisors coordinate closely rather than operating in parallel silos. Understanding the division of responsibility helps you manage both relationships and prevent gaps.
Your investment banker runs the competitive auction process, manages buyer relationships, negotiates economic terms through LOI, and drives the overall deal timeline. The banker's job is to maximize the price and deal structure before the APA phase begins.
Your attorney converts the economics negotiated by your banker into binding legal documents — protecting you from representations, warranties, and indemnity obligations that would erode your net proceeds post-closing.
Your banker should walk your attorney through the LOI, the deal structure, and any issues that surfaced during negotiations — so the attorney understands what was promised and can protect it in the APA.
If attorney diligence surfaces a legal issue (e.g., a lapsed license, a compliance matter, a lease with onerous assignment conditions or an impending expiration), the banker needs to know immediately — because it may affect pricing, structure, or representations made to the buyer.
§1060 allocation, tax structuring, earnout accounting, and working capital definitions all require your attorney and CPA to work in tandem — with the banker available to provide deal context. Establish this three-party working relationship from day one.
Material decisions — accepting an indemnity cap, agreeing to an earnout metric, accepting a non-compete term — should not be made by you in isolation or by any single advisor. Your banker and attorney should both weigh in before you agree to any term that meaningfully affects your economics or post-closing obligations.
Occasionally, bankers and attorneys have conflicting incentives — the banker wants to close the deal (fee at closing), the attorney wants to protect the seller (which can delay closing). Both are legitimate concerns. Acknowledge the tension early and establish that both advisors answer to you — not to each other.
Buyers occasionally suggest or offer to pay for the seller's legal counsel. This is a significant conflict of interest. Your attorney must be engaged by you, paid by you, and answerable solely to you. An attorney recommended or compensated by the buyer cannot ethically represent your interests.
Legal fees in healthcare M&A transactions vary based on deal complexity, deal size, the number of negotiation rounds, and the geographic scope of regulatory approvals required. The ranges below reflect general market norms for seller-side legal counsel in small-to-midmarket healthcare practice transactions. These are estimates only — your specific deal may fall outside these ranges depending on complexity.
| Deal Size (Enterprise Value) | Typical Seller Legal Fee Range | Key Fee Drivers |
|---|---|---|
| Under $5M | $35,000 – $50,000 | Single state, straightforward asset sale, lease assignment, employment agreements — even straightforward deals require full APA drafting, disclosure schedule preparation, and negotiation |
| $5M – $15M | $45,000 – $70,000 | Standard healthcare APA complexity, lease assignment, employment agreements, licensure CHOW, disclosure schedule preparation, multiple negotiation rounds |
| $15M – $30M | $50,000 – $85,000 | Multi-entity structure, earnout provisions, more complex rep and warranty negotiation, potential R&W insurance integration |
| $30M+ | $75,000 – $150,000+ | Multi-state, multi-entity, complex regulatory workstreams, representations and warranties insurance, earnout, extended negotiation rounds |
| Rep and Warranty Insurance (deals $15M+) | Additional $10,000 – $25,000 | Legal review of R&W policy, underwriting support, and integration with APA indemnification framework |
Representations and Warranties (R&W) insurance is worth understanding — but its relevance depends heavily on deal size. Underwriters impose a minimum premium floor, typically in the range of $150,000 to $200,000 regardless of policy size, which makes R&W insurance economically irrational for most transactions below $15M in enterprise value. For smaller deals, the premium is not recoverable — it is a sunk cost paid to an insurer, not proceeds returned to the seller. In those situations, the more practical approach is simply to negotiate a well-structured escrow holdback and wait out the release period. For deals above $15M, R&W insurance becomes increasingly worth evaluating. Your attorney's familiarity with R&W mechanics remains a useful proxy for their sophistication in current market practice regardless of whether your deal uses it.
R&W insurance is a policy — typically purchased by the buyer — that covers losses arising from breaches of the seller's representations and warranties in the APA. It shifts indemnification risk from the seller to an insurer, reducing or eliminating the seller's post-closing indemnification exposure.
When a buyer uses R&W insurance on a deal large enough to justify the premium, the escrow holdback is typically reduced or eliminated — meaning more of your purchase price is paid at closing rather than held back for 12–18 months. For sellers on larger transactions, this accelerates liquidity and reduces indemnification exposure materially. For smaller deals, the better path is a well-negotiated escrow structure: a defined holdback period of 12 to 18 months, a timed release, and clean indemnification mechanics. The escrow funds are your money held temporarily — the R&W premium is your money gone permanently.
R&W policies in healthcare transactions typically exclude coverage for known billing compliance issues, government program investigations, HIPAA violations identified during underwriting, and certain regulatory exposures specific to healthcare. Your attorney should ensure the APA indemnification framework and the policy exclusions are aligned — gaps create unexpected seller exposure.
With minimum premiums of $150,000–$200,000 and additional legal costs for underwriting support, R&W insurance on a $5M or $8M practice sale consumes a disproportionate share of proceeds for coverage that may never be used. The escrow holdback — typically 5%–10% of purchase price held for 12 to 18 months — accomplishes the same buyer protection at no cost to the seller beyond deferred liquidity. If your deal is in this size range and a buyer proposes R&W insurance, understand the cost allocation clearly before agreeing: the premium is not a recoverable deal cost.
Even if your deal is unlikely to use R&W insurance, an attorney who understands how it works — the underwriting process, how it integrates with APA indemnification provisions, and what it excludes — is demonstrating current market awareness. R&W is standard in deals above $15M–$20M and your attorney should be conversant with it regardless of your deal size.
Most sellers sign an attorney engagement letter without reading it carefully — treating it as a formality rather than a binding document that governs the entire attorney-client relationship. The engagement letter defines scope, fees, billing practices, file ownership, conflict procedures, and termination rights. Reading it carefully before signing is not paranoia; it is standard professional diligence. The issues below are the ones that most commonly create friction during or after a transaction.
The engagement letter should explicitly state what the attorney is and is not being retained to do. A letter that says "represent seller in connection with the sale of the practice" is too vague. It should specify: APA negotiation, disclosure schedule preparation, employment agreement review, lease assignment, and any regulatory workstreams. Anything not listed may be treated as out-of-scope — and billed separately or declined entirely.
If you are selling through an entity (LLC, S-Corp, PC), clarify whether the firm represents you individually, the entity, or both — and what happens if their interests diverge. In most practice sales this is straightforward, but in multi-owner transactions or situations involving earnouts or equity rollover, the distinction matters and should be explicit.
The engagement letter should state the billing rate for each timekeeper (partner, associate, paralegal) or the flat-fee amount if applicable. If hourly, ask for a written total fee estimate with assumptions. Confirm whether file review, administrative time, and inter-office conferences are billed — these "soft" hours can add 10–20% to a final bill without ever feeling like legal work.
Insist on a provision — or a written side agreement — that the attorney will notify you before incurring fees on matters they consider outside the original scope. Without this, you may receive a surprise invoice for work you did not authorize and cannot easily contest after the fact. A reasonable attorney will agree to this without resistance.
Your files — drafts, correspondence, diligence materials, disclosure schedules — belong to you, not the law firm. The engagement letter should confirm that you are entitled to your complete file upon request or upon termination of the engagement. Some firms assert a lien over files pending payment of outstanding invoices; understand this provision before it becomes relevant post-closing.
You should be able to terminate the engagement at any time for any reason, paying only for work performed through the termination date. Confirm the engagement letter does not include minimum fee provisions, early termination penalties, or success-fee components that would make changing counsel mid-deal prohibitively expensive. Attorney loyalty runs to you — you should never feel locked in.
Some engagement letters include broad advance conflict waivers — language that permits the firm to represent other parties in future matters adverse to you, as long as it is not in the same matter. Read this carefully. A waiver that permits the firm to represent your buyer or a competitor in a future transaction should be negotiated or rejected. See Section 9 for a full treatment of conflict screening.
Some engagement letters require disputes about legal fees or malpractice claims to be resolved through binding arbitration rather than court. This is not inherently unreasonable, but understand what you are agreeing to — arbitration limits your discovery rights and your ability to appeal. If the clause is present, ask whether it is negotiable.
Attorney conflicts of interest are among the most underappreciated risks in healthcare M&A transactions — and one of the most consequential. A law firm that has represented your buyer, the buyer's PE platform, or a competing practice in your market may have informational or loyalty conflicts that subtly — or materially — compromise their advocacy on your behalf. Conflicts are not always disqualifying, but they must be identified, disclosed, and evaluated before you engage. The questions below should be asked at the start of every attorney interview, before any confidential information is shared.
Law firms that do significant M&A work often represent both buyers and sellers across different transactions — this is standard and generally appropriate when properly disclosed and conflicted off. The issue arises when the same firm (or the same attorney) has an ongoing or recent relationship with your specific buyer or their parent PE platform. Even if the engagement is technically cleared as a different matter, the firm's existing relationship with the buyer creates loyalty dynamics, institutional knowledge asymmetries, and incentives to resolve disputes in favor of the ongoing relationship rather than your one-time transaction.
Beyond the specific buyer, ask whether the firm represents other PE-backed healthcare platforms in your sector. A firm that does substantial work for PT or behavioral health consolidators has institutional knowledge of their deal structures and standard positions — and an incentive to preserve those relationships by not being overly aggressive on your behalf.
If the buyer is represented by an investment bank, ask whether the law firm has worked with that bank on prior deals. Repeat players in the same deal ecosystem develop informal working relationships and professional courtesies that can soften the adversarial dynamic that should exist between buyer and seller counsel.
A firm that identifies a prior representation of the buyer, discloses it fully in writing, explains why they believe they can nonetheless represent you zealously, and offers you the option to seek other counsel is handling a conflict correctly. You can then make an informed choice. The problem is undisclosed conflicts — not disclosed ones managed transparently.
An attorney who acknowledges a potential conflict and then dismisses it without formal disclosure, a written waiver, or the opportunity for you to seek independent advice has not handled it properly under professional conduct rules. Insist on written disclosure of any identified conflict and your written waiver — or find a different attorney.
Of all the components of an Asset Purchase Agreement, disclosure schedules are the most misunderstood by sellers — and the most consequential for post-closing liability. Most sellers focus on the purchase price, non-compete terms, and indemnification caps. But the disclosure schedules are where those provisions either protect you or expose you. A seller who does not understand this dynamic, or whose attorney does not prepare the schedules rigorously, can face post-closing indemnification claims on matters they believed were covered simply because they were not properly disclosed.
Generalist attorneys often treat disclosure schedules as a list of obvious items — pending lawsuits, major contracts, equipment leases. They miss the subtler disclosures that matter in healthcare: payor audit correspondence, billing compliance inquiries, employee grievances, licensing conditions, informal regulatory communications, and any prior OIG or Medicaid audit activity. Each of these, if known and undisclosed, is a potential breach of a seller representation.
Your attorney prepares the schedules based on what you tell them and what they find in diligence. They are not omniscient. You must actively review every representation in the APA against your own knowledge of the business and flag anything — however minor it seems — that might not be perfectly accurate. A $200 OSHA citation, an unresolved employee complaint, a billing audit letter from a payer two years ago — these are the kinds of items that create post-closing indemnity exposure when undisclosed.
A strong seller's attorney conducts a disclosure schedule interview — a structured review session with you (and sometimes your office manager, billing team, or compliance officer) designed to surface every exception to every representation before the first draft of the schedules is circulated. This is not a pleasant process; it requires disclosing imperfections in the business. But it is far less painful than an indemnification demand 18 months after closing.
Many sellers resist disclosing issues because they fear it will give the buyer ammunition to renegotiate price. This is a legitimate concern, but the calculus is usually wrong. A disclosed issue is a known risk the buyer accepts at closing. An undisclosed issue that surfaces post-closing is a breach of representation that can generate indemnification liability far exceeding any price concession the buyer might have sought if the issue had been surfaced pre-close. Disclose proactively, with your attorney's guidance on framing.
During the interview, ask specifically how the attorney approaches disclosure schedule preparation. A healthcare specialist will describe a structured pre-closing review process, a list of commonly missed healthcare-specific disclosures, and a clear methodology for deciding what must be listed versus what is immaterial. A generalist will describe something that sounds more like "we'll fill in the schedules after the APA is negotiated" — which is backwards.
Many representations in the APA are qualified by "materiality" or "Material Adverse Effect" thresholds. These qualifiers limit the representations to matters that are material — meaning minor, immaterial items below the threshold do not technically require disclosure. Your attorney should negotiate these qualifiers aggressively on your behalf, because the higher the materiality threshold, the smaller your disclosure obligation and the narrower your indemnification exposure.
A common seller misconception is that once proceeds are received and documents are signed, the transaction is complete. In reality, the APA creates ongoing obligations that can extend 12 to 36 months beyond closing — and in some cases longer. A seller's attorney who does not brief you on post-closing obligations before closing has left you exposed. The following are the most common post-closing issues that arise in healthcare practice sales and the legal framework that governs them.
The escrow holdback exists specifically to fund potential indemnification claims. During the escrow period — typically 12 to 18 months — the buyer can submit claims against escrowed funds for alleged breaches of your representations and warranties. Your attorney should have structured the indemnification provisions to require the buyer to meet a deductible basket before claims trigger, cap aggregate liability at a defensible amount, and require claims to be submitted with reasonable specificity. Understand the claims procedure and response timeline before closing — if the buyer submits a claim, you have a limited window to dispute it.
The non-compete and non-solicitation covenants you signed in the APA are enforceable as written — with a narrow carve-out for activity specifically excluded in the agreement. Understand precisely what the covenant prohibits: the geographic scope, duration, and definition of restricted activity. Do not make operational decisions (accepting a consulting engagement, joining a practice advisory board, hiring a former employee) without confirming with your attorney that the activity falls outside the restricted zone. Non-compete violations can result in injunctive relief — a court order stopping the activity immediately — as well as damages.
If the APA included a Transition Services Agreement (TSA) — under which you agreed to provide operational support, clinical consultation, or management services for a defined period post-closing — those obligations are binding. Understand what you owe, for how long, and what the consequence of non-performance is under the TSA. Some TSAs include performance incentives; others include clawback provisions tied to TSA compliance. Know which you signed.
If the deal included an earnout, you may have obligations during the earnout measurement period — particularly if you are staying on in an operational role. Understand whether your employment agreement or APA restricts your ability to make operational decisions during the earnout period, how the earnout metric is calculated and reported, and what dispute rights you have if you believe the calculation is incorrect. Earnout disputes are among the most common post-closing litigation matters in healthcare M&A.
Both buyer and seller are required to file IRS Form 8594 (Asset Acquisition Statement) reflecting the agreed §1060 purchase price allocation. The parties are required to file consistent allocations. Your CPA handles the actual filing, but your attorney should have confirmed the allocation framework in the APA — and should brief you and your CPA on the binding allocation before closing so that Form 8594 is filed correctly and consistently with the buyer's filing.
Your attorney should conduct a brief post-closing debrief covering actions that can inadvertently trigger indemnification claims or breach your APA representations: contacting former employees about employment opportunities, discussing the business's pre-closing operations with the buyer's clinical team in ways that could be characterized as representations, mishandling patient records that are now the buyer's property, or operating any aspect of the practice (even informally) outside the scope of your TSA. The APA survives closing. Your obligations under it do not disappear when the wire hits.
Selecting legal counsel is one of the most consequential decisions you will make after signing an LOI. The price your banker negotiated is a starting point — the definitive documents determine what you actually receive, what you remain liable for after closing, and how freely you can operate in the years that follow. A healthcare M&A specialist who has defended sellers against aggressive buyer counsel is not a luxury; it is a necessity. Mihama works alongside your legal and tax advisors throughout the transaction to ensure every workstream is coordinated and that the deal at the closing table reflects the deal you agreed to. If you need guidance identifying qualified healthcare M&A counsel in your state, contact your Mihama advisor — we maintain relationships with experienced practitioners in markets across the country.
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