Reverse Break Up Fee

A Reverse Break Up Fee is a fee paid by the buyer to the seller if the transaction fails to close due to specified reasons, often including financing failure (if allowed), regulatory failure, or buyer breach. In M&A negotiations, a Reverse Break Up Fee is used to allocate deal certainty risk and incentivize buyer performance, and Reverse Break Up Fee size and triggers are closely tied to remedy caps and specific performance rights.

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Ryan Roberts Startup Lawyer
Ryan Roberts is a startup lawyer with more than two decades of experience advising on venture financings and M&A transactions totaling more than $1 billion. He is the author of the Amazon bestselling startup law book Acceleration.