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Course Details

Course Information
  • smart_display Format

    Live Online with Live Q&A

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Commercial Law

Date & Time
  • event Date

    Wednesday, August 13, 2025

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

Early Bird Pricing!
MSRP
$347.00
$297.00
Save $50.00

Discount expires 7/8/25

This course is $0 with these passes:

CLE
ALL

This CLE program will explore the increased prevalence of materiality scrapes in private M&A transactions. The panel will discuss the purpose, function, and implications of materiality scrapes, buyer and seller perspectives, possible areas of compromise, and the role of rep and warranty insurance.

Faculty

Kenneth W. Clingen
Partner
Clingen Callow & McLean, LLC

Mr. Clingen chairs the firm’s business counseling department. He is general counsel to a number of privately owned businesses across a variety of industries and also represents high net worth individuals and family offices. He counsels clients in starting new business ventures, operating their ongoing business enterprises and preparing business succession plans for business owners.

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Kate Sherburne
Partner
Faegre Drinker Biddle & Reath LLP

Ms. Sherburne works with clients to close transformational deals. She focuses on mergers and acquisitions, corporate governance, and securities. Ms. Sherburne also has significant experience with M&A representation and warranty insurance, a product that is being used with greater frequency in the M&A market. Her transaction experience includes: representing strategic public and private clients in acquisition and disposition transactions in industries such as retail, medical devices, software/technology, health care, professional sports, financial services, restaurants, manufacturing and distribution, wholesale, transportation, and recreational vehicles; representing large family-owned businesses in exit transactions; representing private equity firms in transactions involving purchases and sales of portfolio companies; representing management investors in rollover investments; and representing privately held businesses in connection with reorganization transactions, among others.

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Description

Over the past several years, materiality scrapes have become the norm and can be one of the most important provisions in M&A transaction documents. A materiality scrape is a pro-buyer provision that disregards a seller's materiality qualifiers when determining if a seller's representations and warranties were breached or when calculating damages for those breaches. 

There are essentially two types of materiality scrapes. A single materiality scrape eliminates qualifying language as to whether a breach of a seller's representations or warranties has occurred or the amount of damages or losses resulting from a breach, but not both. A double materiality scrape applies to both the determination of a breach and the calculation of losses. 

Buyers and sellers have very different positions regarding materiality scrape provisions and reasons for their inclusion or exclusion in deal documents. Counsel for both parties must understand the impact and operation of materiality scrapes and be prepared to explore various compromises when the parties come to an impasse.

Listen as our expert panel reviews the effect and implications of materiality scrapes for both buyers and sellers and provides practical guidance for implementing these provisions in deal documents. 

Outline

I. Market trends and the increased prevalence of materiality scrapes in purchase agreements

II. Purpose and function of a materiality scrape

III. Types of materiality scrapes: single and double

IV. Buyer and seller perspectives

V. Middle ground approaches when parties are at an impasse

VI. The role of rep and warranty insurance

VII. Practitioner pointers and key takeaways

Benefits

The panel will discuss these and other key considerations:

  • What is a materiality scrape, and what are the implications of including a scrape in an M&A purchase agreement?
  • What are the current market trends with respect to materiality scrapes?
  • How are materiality scrapes viewed by buyers and sellers?
  • What are potential areas of compromise when negotiating materiality scrapes from both a buyer's and seller's perspective?