Share-Transfer Friction, Where a Mid-Market SPA Actually Stalls

By Adv. Alex Blumin

In mid-market M&A, parties spend weeks arguing over price, then discover the deal stalls somewhere else entirely. Not because the number fell apart. Because something in the Share Purchase Agreement (SPA) was not ready to close on the date everyone put in the calendar.

This is not a tour of every SPA clause. It is about one repeating pattern in private-company share transfers: the deal is “commercially agreed,” the paper is almost done, and closing slips by weeks because a condition, a disclosure, or a critical asset assignment was left too late.

No names. No promised outcomes. Just what shows up when you sit on either side of the table.

Price closes. Closing does not

The pattern looks like this. An LOI is signed, diligence runs, the parties align on price and structure (cash / stock / earn-out). Counsel trades SPA drafts. Everyone blocks a Closing Date.

Then, three days out, one of these appears:

• A condition precedent that still has not been satisfied, and no one can clearly test whether it has.
• A disclosure schedule the seller filled in a rush, which the buyer says guts the warranties.
• IP, contracts, or payment accounts still sitting with a founder, a parent entity, or a third party.

None of the three is exotic. All three are visible in week one of diligence, if someone checks them then, not on the eve of closing.

The main lesson: a closing condition has to be closable

Most mid-market SPA friction I see is not a philosophical fight over liability. It is a condition precedent written too wide, or with no owner.

Common field examples (stripped of identifying detail):

• “All required regulatory approvals”, with no list. On closing day, nobody agrees what belongs on the list.
• “No Material Adverse Change”, with no definition that fits this business. A single customer drop becomes a fight about the whole deal.
• “IP assignment to the company completed”, without the assignment documents attached as ready-to-sign schedules before the Closing Date.

The formula that works in practice is simpler than it sounds: every condition needs a name, a document, and a date. Who brings what. What counts as “done.” What happens if it is not, delay, price tweak, or a bounded walk-away.

If you cannot write those three things in one line next to the condition, the condition is not ready to close.

Warranties vs disclosure: the quiet fight

Second recurring point: the seller signs broad warranties (“the company owns all its IP,” “all material contracts are in force”), then dumps a long exception list into the disclosure schedule at the last minute.

From the buyer’s side, that looks like emptying the warranty. From the seller’s side, it looks like real diligence, finally writing down what actually exists.

Both sides get it wrong if they wait until closing week. The disclosure schedule should be built in parallel with diligence, not after the SPA is “done.” Otherwise closing turns into a fresh negotiation on price and risk allocation, exactly when everyone is tired.

A practical working rule: every material diligence finding that week either goes into the disclosure schedule, into a pre-closing fix list, or into a conscious price discussion. Not all three in the final 48 hours.

Assignments that must happen before signing, not “at closing”

In tech and growth deals, the most expensive friction I see is an asset that is still outside the company on closing day: code with a contractor and no assignment, a trademark in the founder’s name, a key customer contract that needs change-of-control consent and was never requested, or a payments account under another entity.

“Seller shall cause the IP to be assigned by closing” sounds orderly. In practice, if the assignment paper is not waiting for signature before the Closing Date, you are on a third party’s calendar, contractor, bank, or customer, on the day you already booked the notary.

The sharp lesson: whatever must sit inside the company for the buyer to get what it paid for should be ready as a signed (or ready-to-sign) schedule before you lock a hard closing date. Otherwise the date on the calendar is a wish.

What to do earlier in the draft

Without turning this into a 40-clause checklist, three moves that cut friction in mid-market closings:

1. A closed list of conditions by SPA draft 2, with an owner and a document for each item.
2. A living disclosure schedule updated week by week with diligence findings, not a last-night file.
3. Assignment / third-party consent schedules ready before anyone puts Closing Date in the calendar as firm.

None of the three replaces a real fight over price or liability. All three prevent the moment when everyone agrees on the number, and there is nothing ready to sign.

Takeaway

In a mid-market share transfer, closing stalls less on price and more on ownerless conditions, late disclosure, and a critical asset still outside the company. Before you lock a closing date, walk every condition and ask: name, document, date? If not, the date in the calendar is not real yet.

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FAQ

What is a condition precedent in an SPA? A condition that must be satisfied before the parties are obliged to complete the share transfer, for example a specific approval, an IP assignment, or the absence of a defined material adverse change. A wide condition with no definition and no owner is a common source of closing delay.

When should the disclosure schedule be prepared? In parallel with due diligence, not on the eve of closing. Material findings should go into disclosure, a pre-closing fix, or a conscious price discussion in real time.

Why do tech deals stall on IP assignment? Because code, marks, or contracts still sit with a founder, contractor, or other entity. If assignment documents are not ready before the closing date, closing depends on third parties, and that is a delay recipe.

CTA: Before you lock a closing date on a share transfer, initial conversation · Adv. Alex Blumin · Updated: 24 Oct 2026

Related: LOI trap · Buyer NDA before due diligence