In a previous post we began exploring lease considerations that
landlords and parties to asset purchase and sale transactions
should be aware of in the M&A context, including that many
commercial leases will require landlords' prior written consent
to an assignment and that the original tenant/assignor typically
will not be released from its covenant absent landlords'
agreement (notwithstanding any assignment). We went on to discuss
some strategies to mitigate this issue from a seller/assignor
perspective, such as requiring releases and/or a replacement
covenant from the purchaser/assignee as a condition precedent to
closing.
From a purchaser/assignee perspective, in addition to wanting to
include express provisions in an asset purchase agreement requiring
landlords' consent to lease assignments, other important
closing deliverables/conditions include obtaining landlord
estoppels, requiring that notices of key leases be registered on
title to the subject properties
