Post M&A Ownership Disputes and the Role of Specialist Boutiques

The post-COVID-19 deal boom left behind more than a long list of completed transactions. Money was cheap and deals moved quickly and, at times, recklessly, with rumours of earnest money wires sent pre-LOI circulating the legal industry. Deal documentation reflects the frenzy: disclosure schedules were thin, operating and shareholder agreements defining rights and preferences of rollover equity holders were left as an afterthought, and defined terms were carried over from prior transactions without sufficient review. Many sellers remained involved after closing as executives, directors, landlords, guarantors or minority investors. Several years later, disputes over earn-outs, governance rights and the division of enterprise value are beginning to test those continuing relationships.

The size of that deal cohort is significant. Capstone Partners reported that US middle-market deal volume fell 16.4% in 2020 before rising 34.1% in 2021, its highest level in seven years. In Capstone’s description, 2021 compressed roughly three years of dealmaking into one.

Deal activity has been uneven since then. Higher interest rates and persistent valuation gaps slowed the market for several years. By the first quarter of 2026, Capstone reported a 10.7% year-on-year increase in overall middle-market volume. The recovery was concentrated at the ends of the market: volume rose 45.8% in the USD10 million–USD100 million segment and 38.2% in the USD250 million–USD500 million segment, while the USD100 million–USD250 million core remained comparatively constrained.

Florida’s ownership demographics, however, will keep succession and sale issues active. The US Census Bureau’s 2024 Annual Business Survey, using 2023 reference-year data, reports that 52.2% of Florida owners of responding employer firms who reported their age were at least 55 years old. The total includes 22.7% who were 65 or older. McKinsey’s 2026 model estimates that approximately six million US businesses with fewer than 500 employees will face an ownership transition by 2035. More than one million may be viable candidates for a sale or an employee-ownership transaction, representing as much as USD5 trillion in potential enterprise value.

While difficult to confirm, the figures suggest that baby boomers are already selling businesses at record rates. Regardless, they certainly demonstrate an unusually large pipeline of founder-owned companies that will need a plan. Some will be sold or recapitalised; others will pass to family or management, and some will wind down. Each path can produce disagreements over price, disclosure and control.

At the same time, the cost of outside counsel has climbed faster than inflation, even as corporate legal departments are being pressed to do more with limited budgets. That combination has opened part of the market to specialist litigation boutiques. A properly staffed boutique can handle a sophisticated dispute for a middle-market company and, where the circumstances fit, for a much larger enterprise.

A sale may leave the ownership relationship intact

An acquisition does not always end the parties’ relationship. A seller may roll equity into the buyer, stay on as an executive, retain a board seat or lease essential property to the company. The same seller may also guarantee company debt or hold a contractual right to future earn-out payments. If the seller is still on the cap table, a party to the lease, or potentially entitled to an earn-out, the closing did not end the relationship. It changed the parties’ leverage against one another.

When one of those arrangements breaks down, the dispute rarely stays within a single document. An earn-out claim may depend on whether the buyer shifted customers or loaded expenses onto the acquired business. Terminating a founder can affect voting rights, equity vesting and restrictive covenants. A failed integration may also prompt claims that the controlling owner withheld information, diluted the seller’s interest or favoured an affiliate. The interplay between the documentation only serves to compound the problem. The purchase agreement, equity documents and employment agreements each contain separate off-ramps. They are not harmonised prior to closing, a clean termination under an employment agreement, for example, can still become a “bad leaver” event under another document with adverse consequences to the seller such as loss of a board seat or forfeiture of an earn-out payment.

Purchase-price adjustments leave another issue open after closing. SRS Acquiom’s proprietary study of more than 1,500 private-target acquisitions found working-capital adjustments in more than 90% of the transactions, up from 50% a decade earlier. Its related deal-terms data found an adjustment mechanism in 93% of deals and an actual adjustment in 89% of the deals that included one.

Earn-outs are a particularly common source of friction. In SRS Acquiom’s proprietary lower-middle-market data, 29% of deals with a closing payment of USD50 million or less included an earn-out. The figure rose to 35% for deals at or below USD25 million. Outside life sciences, only slightly more than half of private-target earn-outs produced any payment. Once zero-payment outcomes were counted, sellers received about 21 cents for every earn-out dollar available.

These provisions often serve a legitimate purpose. A true-up can correct for changes between signing and closing, while an earn-out can bridge a valuation gap that might otherwise prevent a deal. The difficulty is that part of the price remains dependent on accounting judgments and business decisions made after closing, often by the buyer that will calculate the payment.

Why disputes surface years after closing

Post-closing claims take time to develop, so the combination of a more strenuous economic environment paired with the passage of time has seen post-COVID-19 boom litigation develop rapidly in 2024 through 2026. Earn-out periods, indemnity provisions and integration plans can run for years. A disputed liability or alleged diversion may not become apparent until an audit, a management change, a customer departure, or allegedly missed earnout hurdle. The contract calendar drives the timing as much as the economy does. Survival periods run out. Escrows are scheduled for release. Earn-out measurement dates arrive. That is often the first time anyone rereads the definitions accepted the night before signing.

Representations-and-warranties insurance data shows the delay. Aon’s 2026 Transaction Solutions Global Claims Study found that 51% of claims were notified more than 12 months after closing. Approximately 18% of Aon’s North American policies bound from 2019 through 2023 received at least one claim notification. The less mature 2023 and 2024 policy cohorts were trending above 20%.

SRS Acquiom also reported more claims under the no-undisclosed-liabilities representation for transactions completed during the 2021 and early-2022 surge than for pre-2021 deals. It attributed the pattern in part to high valuations, short timetables and the practical limits on diligence during the busiest period. Claims data is not the same as litigation data. Aon reports that the overwhelming majority of its claims are resolved through negotiation; only 1% in the relevant settlement-data subset proceeded to arbitration or litigation.

Court-filing data does not yet support a nationwide claim that post-M&A lawsuits have surged. The post-COVID-19 transaction wave nevertheless created many more relationships from which a dispute could arise, and new ownership transitions continue to add to that pool. In Florida, those cases often combine acquisition agreements with the law governing closely held LLCs, corporations and partnerships.

How post deal disputes take shape

What begins as a complaint about an earn-out or a former partner often expands as the documents and accounting records are reviewed. Common areas of dispute include the following:

• purchase-price disputes – working-capital calculations, debt-like items, transaction expenses, revenue recognition, accounting principles, earn-outs and milestone payments;
• pre-closing disclosure claims – alleged breaches of representations and warranties, undisclosed liabilities, customer or employee losses, and fraud or concealment theories;
• control and information disputes – board or manager rights, reserved decisions, budgets, inspection rights, access to financial systems and the removal of a founder from management, changed accounting approaches (which may impact earnout considerations);
• minority-owner claims – dilution, withheld distributions or earnout payments, excessive compensation, related-party transactions, diversion of opportunities, and use of company assets for the controller’s benefit;
• exit disputes – transfer restrictions, put and call rights, compulsory-sale provisions, valuation, deadlock, buyout and dissolution; and
• continuing-obligation disputes – transition services, employment, restrictive covenants, indemnification, escrow releases, affiliate leases and personal guarantees.

A separate problem sits underneath most of those categories. The purchase agreement, the disclosure schedules, the rollover documents, the operating or shareholders’ agreement, the employment agreement and the equity-award paperwork were often negotiated on different time frames and with different terms. “Cause”, “Good Reason”, “Change of Control”, “Confidential Information”, “Competing Business”, and the ever ambiguous “discretion” are sometimes defined differently throughout the several documents.

Rollover equity is where acquisition disputes most often meet traditional business-divorce law. A seller with a retained minority interest may claim that the buyer breached the purchase agreement and separately that the new controller injured the company. The seller may own the first claim directly, while the second belongs to the entity and must be pursued derivatively.

Getting that distinction right at the outset matters. It affects who receives any recovery, whether the claimant must first make a demand on the company and who has authority to settle. It may also determine whether the company must be joined and how privilege, indemnification and insurance issues are handled. A complaint that treats every loss as personal to the owner may seek the wrong remedy or face dismissal. Deal counsel can reduce that problem at signing. If a right is meant to be personal to the rollover seller – a board seat, a consent right, an information right, a distribution waterfall, an earn-out – put it in the governance document. Do not leave it only in the purchase agreement and hope the two will be read together.

Florida procedure and remedies

Counsel should identify the governing law before choosing a claim or remedy. Florida law governs the internal affairs of a Florida entity, while the law of the formation state ordinarily governs a foreign LLC or corporation, even if the business and its owners are located in Florida. The acquisition agreement, rollover documents, operating or shareholder agreement, employment agreement, equity-award terms and guarantees should be read together. Forum-selection and dispute-resolution clauses often add another layer of complication and consideration.

Section 605.0105, Florida Statutes gives members of a Florida LLC significant freedom to structure their affairs through an operating agreement, subject to statutory limits. The agreement may allocate management authority, reserve specified decisions, regulate transfers and modify certain fiduciary duties. That flexibility is useful when entering the deal. A buyer seeking a controlled-company structure should use clear reserved matters, meaningful affiliate-transaction approvals, information rights that survive any seller employment, and an express statement of what happens to governance rights if the seller founder is terminated. If the entity is a Delaware LLC operating in Florida, the same work must be done under the Delaware LLC Act. Different statutory regimes require deal counsel to use different tools at the front end. Failing to meaningfully prepare in this regard is how partnership disputes – both direct and derivative claims –  are made.

Sections 605.0801 and 607.0750 provide the starting point for direct actions by Florida LLC members and corporate shareholders. A claimant must plead and prove an injury that does not arise from harm first caused to the entity or the breach of a separate statutory or contractual duty owed to that claimant. For example, claims based on diversion of company assets belonged to the company irrespective of ultimate harm to shareholders or members and must be brought derivatively, while claims enforcing specific unanimity, earn-out payments, and individual rights under a shareholder agreement could proceed directly.

Derivative requirements must be analysed before a complaint is filed. Sections 605.0802 and 605.0803, for example, ordinarily require a Florida LLC member to demand that the proper company decision-makers act and to allow the statutory response period. Demand is excused if it would be futile or if waiting would cause irreparable injury to the LLC. Corporate derivative claims are governed by separate standing, verification and particularised demand requirements in Sections 607.0741 and 607.0742. Once again, however, there are dangers. Well-versed litigators may seek to co-op a derivative claim through a special litigation committee or other statutory nuance.

The available remedies also require close attention to the statute. For instance, a Florida LLC may be dissolved for specified grounds that include illegality or fraud, waste or misappropriation, impracticability and a qualifying deadlock that threatens or causes irreparable injury. However, a dissolution action poses its own risks. In an action by a member to dissolve the company, for example, the company or another member may elect under Section 605.0706 to purchase the petitioner’s entire interest at fair value. A dissolution petition brought by an upset member can therefore quickly turn into a court-supervised forced buy-out.

The market for dispute counsel

The economics of outside counsel are changing while the post-deal dispute pipeline develops. Thomson Reuters reported that worked law-firm rates rose 7.4% in 2025, against inflation of 2.8%. Over the past decade, those rates have increased at least twice as fast as inflation. A separate 2026 report issued with Georgetown Law placed 2025 worked-rate growth at 7.3% and average law-firm profit growth at 13%.

Demand rose as well. For the third quarter of 2025, Thomson Reuters measured year-on-year growth of 7.6% in M&A demand and 4.9% in litigation demand. The figures capture simultaneous pressure on transactional and litigation practices; they do not establish that deal work caused the increase in litigation.

Corporate law departments have responded by scrutinising both staffing and price. In 2024, Thomson Reuters reported that nearly half of general counsel planned to send more work to lower-cost firms or alternative providers. Nearly 40% were specifically looking for lower-cost litigation counsel. The following year’s State of the Corporate Law Department report found that 61% of surveyed general counsel considered greater use of alternative fee arrangements a medium or high priority.

Legal budgets are not necessarily expanding to absorb the additional work. A 2026 benchmarking study by the Association of Corporate Counsel and Major, Lindsey & Africa drew on 576 legal departments in 45 countries. Median total legal spend had fallen to 0.43% of company revenue, the lowest level in six years, while each in-house lawyer supported a median of 367 employees. In-house teams are carrying larger workloads while outside rates continue to rise.

That leaves a practical opening between local generalists and the largest national firms. A middle-market ownership dispute requires the same sophistication and experienced trial counsel, forensic accounting, modern discovery systems, and working knowledge of acquisition and entity law as a larger deal. Middle market deals or smaller dollar investments in the seven or eight figures often have the same or greater complexity as larger dollar deals. At the same time, the amount in dispute may not justify the staffing model and rates of a large national platform.

A good is example is two founding shareholders with differing equity percentages who sell a business. Perhaps Founder A owns 90% and, upon earnout stands to earn USD90 million, while Founder B owns 10% and upon earnout stands to earn USD10 million. An earnout dispute for the two founders would involve the same contract, complexity and conduct – but for Founder B, a multi-million dollar legal spend is simply not doable.   

This is where specialist litigation boutiques come in. While at times difficult to find or identify, high-end boutique firms with the right lawyers and infrastructure are often well equipped to handle these sorts of sophisticated matters. That said, smaller size does not guarantee lower cost, and a premium boutique will not be inexpensive. But overall legal spend is often mitigated not only by more reasonable rates. Total cost is often reduced by leaner, more efficient staffing, more active senior lawyers, quicker decisions and fewer lawyers between client and trial counsel.

The same model can work for an upper-middle-market or large-enterprise client, and as detailed below, trends are showing a transition by larger entities to these sorts of often formidable boutique shops, at least for certain types of matters. A boutique may be retained because a large firm has a conflict, a board or special committee needs independent counsel, or a focused trial team is needed alongside a full-service firm. These smaller firms are often an asset to Big Law, where conflicts or cost are impediments to certain matters and a trusted, temporary referral is needed.

The market data reflects some movement in that direction. Thomson Reuters’ 2026 legal-market report found that smaller firms captured the lion’s share of the year’s demand growth as clients moved work away from the most expensive firms. The report does not measure litigation boutiques separately and cannot establish a specific increase in their market share. It nevertheless confirms that clients are more willing to match a matter with the firm that best fits it instead of treating size as a substitute for capability. Of course, large full-service firms remain the right choice for many matters, especially when a dispute requires co-ordinated tax, bankruptcy, regulatory or employment advice, money transmission, oil and case, or matters across several jurisdictions.

Practical steps for owners buyers and investors

Many of these disputes can be narrowed through careful drafting. A purchase agreement should identify the accounting principles and order of priority that govern a true-up or earn-out. It should also provide access and audit rights, define the buyer’s operating discretion after closing and establish a realistic process for expert determination or litigation. Even a detailed formula can fail if the agreement does not address acquisitions, shared costs, customer transfers or changes in accounting policy.

Rollover governance requires the same care. The acquisition documents and the operating or shareholder agreement should align board rights, consent rights, information access, distribution policy, dilution protection and procedures for affiliate transactions. They should also explain what happens to governance and equity rights if the seller’s employment ends. Inconsistencies among the purchase agreement, governance documents and equity-award terms are an invitation to litigation.

On the transactional side, the work is less about new concepts than about finishing the ones already on the table.

• Attach a sample working-capital statement and a sample earn-out calculation. Say which controls if the formula and the example conflict.
• Write the accounting waterfall: historical practice, then the defined principles, then the specified exceptions. If a particular treatment of deferred revenue, customer deposits, accrued bonuses or government credits is intended, put it in the agreement. Do not assume the QoE will be read into the definitions.
• Give the seller information and audit rights that can actually be used in the objection period. A short window against books the seller can no longer open is not a process and invites future disputes.
• Line up the rollover operating/shareholder agreement with the purchase agreement before signing, not in the week after closing. Board composition, removal, budget approval, related-party transactions, pre-emptive rights and transfer restrictions should tell the same story in both documents.
• In the equity documents, decide what termination of employment does to vesting, voting, information rights and any put or call. Good-leaver and bad-leaver mechanics only work if “Cause” and “Good Reason” are consistent.
• If there is a put, call or drag, state the valuation date, the standard of value, whether minority discounts apply and who breaks a deadlock between appraisers. Don’t rely on statutory procedures if an alternative can avoid a future dispute entirely.
• Treat affiliate leases, transition services and personal guarantees as part of the deal documents. If a guarantee is supposed to come off at refinancing or after a period of compliance, say when and on what conditions.
• Co-ordinate restrictive covenants across the purchase agreement and the employment agreement. A sale-of-business covenant and an employment covenant are not interchangeable, and Florida enforceability turns on the statute and the facts. Inconsistent defined terms are a gift to the party that wants out of the restriction.
• Read the RWI binder against the indemnity chapter before the policy is issued. What the insurer carves out still lives in the contract.

After closing, the company should keep written approvals, document conflicts and maintain reliable financial reporting. Company expenses and personal expenses should remain clearly separated. Governance documents and guarantee exposure should be reviewed after an acquisition, recapitalisation, ownership transfer or major management change. Good records discourage misconduct and make a legitimate disagreement easier to resolve.

What comes next

The post-COVID-19 transaction wave will continue to generate disputes as earn-outs mature and integration decisions are tested. Florida’s ageing owner population and the uneven recovery in deal activity will add new succession and acquisition matters. Regardless of size, these deals require the right transaction counsel and, in the event of an unfortunate dispute, the right litigation team to handle them.