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I work on acquisitions/sales of companies. I showed ABC Co. ownership a potential acquisition (XYZ Co.) that they passed on. A few months later, ABC Co. themselves was for sale. ABC's private equity ownership group sold ABC...and then the new private equity owners (with some ABC management still in place) bought the company I showed them. The NDA was still in effect and management team wouldn't have even known of the existence of the company had we not shown it to them.

What is the recourse here? To complicate things, I am no longer with the firm that confidentiality agreement was with. I have since opened my own shop. Thanks for any advice on this.

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    Comments are not for extended discussion; this conversation has been moved to chat. – feetwet May 14 at 21:18
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Here is my interpretation of the facts. W (which includes you and some others) have an NDA with company A, which prohibits A from using any material information provided by W, for two years. A was then sold to B, and B used that information contrary to the NDA. Therefore: W can sue B for damages, because they breached the agreement. The obligation is not extinguished when B buys A.

You are no longer part of W: can you sue B for damages? It depends in whether you have a property interest in the protected information / relation. For example, if you were just a wage employee of W and you quite, you probably have no property interest in the information. If you were a partner and were bought out, there will surely be some written statement of the division of company property. You might have bargained away that right in exchange for more cash; or you might have retained the interest. If you have a property interest in the protected info, you could sue for (your share of the) damages. This is about who has standing. The only credible remedy would be a monetary award, that is, you shouldn't expect that the courts would order the sale to be rescinded.

  • Thanks. Yes, you have it correct. My claim or standing was 40% of the fee on a deal that saw the company get acquired. At this point I do not know what the company was acquired for but for argument's sake let's say it was $1,000,000 and the advisory fee was 5%, so a $50,000 fee. My 40% would have been $20,000, so not nothing. I'm not aware if W even knows that the sale occurred and has made any movement on this matter, since I have no contact with them. It would probably cost me somewhere close to $20K to litigate this, I would guess. Any thoughts on me making a move, without W being involved? – Sizzle May 15 at 16:15
  • I am the signee on the documents involved. – Sizzle May 15 at 16:20

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