When people refer to broken deals, they often use a broad brush to describe how they occur and the ramifications resulting therefrom. Typically, the focus is on the costs associated therewith and how they are allocated among GPs and LPs. There is another set of concerns, however, related to potential liability that can flow from broken deals. The potential scope and severity of that liability often stems from what type of issue caused the deal to collapse or the context of when it occurred. Fund managers need to guard against those risks as they pursue transactions. In this second article in a two-part series, MoloLamken attorneys Justin M. Ellis and Caleb Hayes‑Deats consider different types of claims that can arise after deals fall apart and provide practical lessons for fund managers from caselaw, including those arising from a breach of fiduciary duties; situations involving distressed companies; and circumstances where parties are charged with aiding and abetting conduct that results in the collapse of a deal. The first article examined risks associated with deals falling apart due to the occurrence of material adverse changes or effects; misrepresentation claims; and breaches of non-disclosure agreements. For more on transactional risks, see “Practical Tips for Overcoming the Operational Challenges of Corporate Carve-Out Transactions by PE Funds” (Aug. 4, 2020).