Glossary · People and paperwork
In short
This refers to any pending legal action against the business you're buying. An existing lawsuit can pose a significant financial risk and impact the deal's viability.
During due diligence, you must uncover any existing lawsuits involving the business, its owners, or key employees. A lawsuit, especially one with potential for significant damages or reputational harm, can be a material liability. Your attorney needs to assess the merits, potential costs, and impact on the business. It may require an escrow or holdback from the seller, or even renegotiation of the purchase price.
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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