How a WARN Act Clause Torpedoed a $2 Billion Deal

When a private equity firm agreed to buy a 4,200-employee manufacturer, the seller's last-minute request to shift WARN Act liability into the purchase agreement killed the deal. This episode drills into the Worker Adjustment and Retraining Notification Act — a 1988 law that rarely surfaces in due diligence until deal attorneys realize a plant closure within 60 days of closing triggers up to 60 days of back pay and benefits for every affected worker. Lucas walks through the specific deal: a $2.1 billion offer for Midwest Precision Parts, signed and ready, until the buyer's attorneys flagged a planned layoff of 340 workers at a non-core facility. The seller wanted post-closing indemnity for any WARN Act claims. The buyer walked. Luna pushes back — isn't this just a negotiating tactic? Lucas shows how the risk profile changes when you price the tail: a class-action WARN suit can hit $7 million in damages plus legal fees, and the cost of indemnity insurance would have eaten the deal's IRR. The episode closes on a forward-looking note — what happens when a target company has a restructuring plan already baked into the closing timeline. #WARNAct #MergersAndAcquisitions #DealKillers #MidwestPrecisionParts #PrivateEquity #DueDiligence #LiabilityClauses #Indemnity #ClassActionRisk #ManufacturingM&A #Business #BusinessPodcast #FexingoBusiness #AcquisitionTalk #MADealStructures #LaborLaw #EmployeeLiability #DealBreakdown Keep every episode free: buymeacoffee.com/fexingo