KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Comment on Buy-sell deals – who does due diligence / webinar registration
March 2, 2022
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Webinar Schedule: See below for details and Registration
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Webinars:
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March 8, 2022. Recruiting, hiring and retaining field talent
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March 9, 2022 Insurance Broker contribution to Due Diligence in acquisition transaction
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Comment on Buy-sell deals – who does due diligence from article on March 1, 2022
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Ken,
I really like the topic. I wish I had a dime for every Seller who told me that their “…insurance broker said that the contracts were fine.” Yes the insurance broker didn’t have an issue, but the contracts weren’t very marketable (i.e. $9.95 monitoring with radio and free service). They were perfectly legal and insurable, but who would want them?
Insurance brokers play a valuable role, but their focus is on mitigating damages and claims, not the economic viability of the transaction.
Most of the examples in the article relate to assumption of liability in a stock purchase.
A Company’s monitoring agreements are their most important asset, but there is still a lot more to due diligence than simply thumbing through a stack of contracts. Yes, if the Seller has Kirschenbaum’s Contracts they are going to be good, but how recent are they, have they been modified, and, did the Seller actually purchase them or did they try to recreate them?
There are other important items to touch on in an acquisition due diligence, more than this space allows but they include, customer payment histories, geographic response issues, is the account active at the central station, is there an expectation of free service, is the customer past due, is the property an apartment, etc…? Due diligence from an insurance broker is valuable in that it reduces risk, but if you are considering buying a group of accounts you should contact us. Our team has been doing this for over 20 years and 350 transactions. We know what to look for, and we can do it quickly and economically.
Mitch Reitman
817-698-9999 XT 101
Reitman Consulting Group
Fort Worth, TX
817-698-9999
http://www.reitman.us
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Response
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There is a place for the insurance broker in the due diligence process, particularly the insurance issues, and there may be a lot of them, especially in a Stock Purchase Agreement; maybe not so much in an Asset Purchase Agreement.
I have been attuned to E&O coverage, which in the alarm industry usually isn’t a problem because the insurance is Occurrence, not Claims Made, and also in an asset deal the buyer isn’t taking over the seller’s liabilities.
But there are many other insurance policies that may need review, such as auto, premises liability, Director and Officer, health insurance coverage and other insurance covering employees, environmental and pollution.
One insurance professional who does due diligence is Shawn Iverson, with The Insurance Center, Ogden, UT, 801 622 2626. They are listed on The Alarm Exchange and they have a “Tool Kit” that they use for due diligence. No doubt a great resource. I hope to schedule Shawn for a webinar soon.
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Webinar: Registration - sign up today
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Webinars
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Webinar Title: Recruiting, hiring and retaining field talent
When: March 8, 2022 12 PM ET
Topic Details: Even before the pandemic, hiring and retaining field talent in the security industry was growing increasingly difficult. This webinar will explore the best ways to find talent, prequalify them and develop enthusiasm to consider joining your team as well as how to quickly determine if a candidate’s psychomotor skills match their resume. Webinar will discuss skill matrixes and why they are valuable tools to incentivize and retain talent, help improve morale and promote consistent, transparent compensation.
Presenter: Peter Goldring, SET, NICET #143428 Fire Alarm Systems, Level IV, ACFE Certified Fraud Examiner. Peter M. Goldring Consulting LLC Phone 516-640-1410 peter@goldringprotection.com www.goldringprotection.com
Hosted by: Ken Kirschenbaum,Esq.,
Who should attend: Company owners, CEOs, CFOs, Manager, Human Resource Personnel
Register Here: https://register.gotowebinar.com/register/7491717510381999116
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Webinar Title: Insurance Broker contribution to Due Diligence in acquisition transaction
When: March 9, 2022 12 PM ET
Topic Details: Due Diligence to varying degree is essential in an acquisition transaction. Insurance considerations are best reviewed by an insurance expert.
Presenter: Shawn Iverson, CIC The Insurance Center, Ogden, UT 801-622-2626
Hosted by: Ken Kirschenbaum,Esq.,
Who should attend: Company owners, CEOs, CFOs, personnel involved in acquisitions
Register Here: https://attendee.gotowebinar.com/register/2096504113021511184
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
www.KirschenbaumEsq.com
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