Provided by:  Jennifer Kirschenbaum, Esq.

July 18, 2019




The buyer of my practice wants to indemnify me for post-closing conduct with his corporate entity.  Should that matter?  

Dr. M 


Depends.  Certainly would matter if the entity being offered to "indemnify" had no revenue coming in or assets, or was encumbered by debt.  To break down the question (this is a live question from current sale) - you're telling me you are selling your practice (presumably an asset sale) and the buyer is willing to "indemnify" (meaning, be financially responsible) for post-closing conduct of the practice its buying.   To reframe the comment above, the contractual obligation to take financial responsibility is only as good as solvent is your guarantor.   So, to circle back, if the entity is fiscally sound, with reserves or ARs or assets, then the indemnity may be sufficient to protect.  If not, then you may want an individual (with assets) on the hook, or an escrowed amount, or more money down, or some other fix....   

Let's see where it plays out...