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Cross-Border Cases
Practice review: earn-out and performance disputes in cross-border M&A
Vague earn-out wording easily turns into protracted post-closing disputes.
A typical scenario: a cross-border deal includes a performance earn-out, and after closing the parties dispute the compensation amount over performance metrics, accounting, or operational control.
Earn-out disputes often stem from unclear terms on 'how performance is calculated and who controls operations'.
The lesson: write performance definitions, accounting standards, intervention boundaries, and dispute mechanisms clearly, and consider escrow and other risk mitigants.