Locked Box Principle

As an alter­na­tive to the concept of ‘closing accounts’, the so-called locked box prin­ci­ple has also become estab­lished in recent years. Concep­tually, this prin­ci­ple is not about adjus­ting the purchase agree­ment, but rather about the parties working towards an inte­rim closing as close in time as possi­ble refe­rence, which is usually guaran­teed by the seller. The seller then addi­tio­nally guaran­tees the buyer that no direct or indi­rect outflows (usually liqui­dity outflows, e.g. divi­dends) have been made to the seller or rela­ted third parties since the inte­rim balance sheet date. Any profit gene­ra­ted in the mean­time shall accrue to the bene­fit of, and any loss to the to the disad­van­tage of the buyer. The seller achie­ves price secu­rity through the fixed purchase price; subse­quent purchase price adjus­t­ments can at most still result from warranty or contract viola­ti­ons. In addi­tion to the fixed purchase price, inte­rest is often agreed on the purchase price until the closing date.