Ann: SGH advises Watchstone Group Plc of claim under SPA-SGH.AX, page-211

Warranty escrows are there to ensure there's enough money readily accessible to cover any proven claims (in effect reducing the acquisition cost). There's a fairly standard form that applies to such agreements, usually relating (as I have said before) to the existence of assets and liabilities and knowingly or recklessly making statements of fact that are subsequently discovered to have been untrue. Little else of real substance is generally covered and warranties as to future performance are a rarity, None will have been given here.

What conditions are there to fulfil? The following is an extract from an article I found without looking too hard - it covers more than was likely to be included in the S&P agreement relating to PSD but it's a reasonable guide. There are plenty of articles to be found using google. I typed in "normal warranties in sale and purchase agreements" and saw there is plenty of guidance available.

What is in the SGH/WTG S&P agreement in relation to warranties is commercially sensitive. The fact it's taken so long for SGH to 'discover' the warrant 'events' is likely to count against them imv. Makes it look like a try-on (to me at least). AG & BH may think they have nothing to lose bytrying to encourage WTG to settle but I have a feeling it might explode in their faces - particularly AG's because it will bring back into focus his disastrous decision and WTG may not be slow to point out a number of things I would about the way the integration was managed that would reflect very badly on him (and deservedly so). He appears to have been clueless (as was Wayne Brown up to the point he left) about what was going on in the UK in the whole of the first 6 months post acquisition.

Says it all as far as I am concerned. It's a bit late to be looking to others to take the blame. All imho of course. The reduction in the value if the business was caused by a number of things, none of which are WTG's fault. How about: "AG paid way too much in the first place - then along came George Osborne" just for starters.

Here's the extract:
"Warranties are statements of facts made by a seller in the SPA relating to the condition of the company being sold. If a warranty subsequently proves to be untrue and the value of the company is reduced, the buyer may have a claim for breach of warranty. Warranties will cover all areas of the company including its assets, accounts, material contracts, litigation, employees, property, insolvency, intellectual property and debt. If more specific risks are identified during due diligence, it is likely that these will be covered by an appropriate indemnity in the SPA under which the seller promises to reimburse the buyer on a pound for pound basis for the indemnified liability".............

............plenty there to choose from - they weren't told that Maud Smith in accounts was going to get pregnant maybe?