With the current and expected increase in distressed mergers and acquisitions (M&A) resulting from COVID-19, either in the bankruptcy context of §363 sales or outside of bankruptcy in expedited transactions, it is worth revisiting tools to provide buyers with protection from transactional risks where sell side indemnities are either scarce or impossible.

This article, first published on Bloomberg Tax, examines transactional tax liability policies, a more recent tool that functions as an alternative to a seller escrow to provide compensation to insured parties in the event of audit or tax controversy.

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