A recent High Court decision, Atten Bidco Ltd v Assassa and Others [2025] EWHC 2347 (Comm), has highlighted just how critical warranties and disclosure are when selling a business. For anyone thinking of selling their company, this case is a timely reminder of what can go wrong – and how to protect yourself. (see full judgment here)

The background

Tisski Limited, a successful IT consultancy, was sold in 2022 for £45 million under a Share Purchase Agreement (SPA). The buyer, Atten Bidco (part of Node4), later claimed the sellers had breached various warranties about the company’s contracts, financial position and ability to deliver key projects.

The claim had three strands, each linked to a major customer contract:

• National Audit Office (NAO) – a multi-million pound fixed-price project to build a new audit management system, where the buyer said delivery was far harder and riskier than disclosed.

• Aquila Air Traffic Management Services – where a contract was lost before completion of the sale but not properly flagged to the buyer.

• Ministry of Defence – where some £90,000 of work in progress should have been written off in the “locked box” accounts.

The most important of these was the NAO contract. It was supposed to be a “key win” for Tisski, but evidence showed it had been tightly priced, under-resourced, and carried serious delivery risks. Internally, staff described it as a ‘hatchet job’, ‘very challenging’ and made them feel ‘twitchy’.

The key warranty at issue was that the company was not party to any agreement which “could not readily be fulfilled on time or without undue or unusual expenditure of money or effort”. The sellers argued that because the project was still expected to make a profit, the warranty wasn’t breached. The judge disagreed.

The court found that profitability alone wasn’t the test. What mattered was the extraordinary strain the contract placed on the business — tight deadlines, brutal fixed-price terms, and problems with the NAO’s “RAPT” tool meant that Tisski’s staff had to put in huge extra effort, often delivering work for free just to keep the project on track. That was exactly the kind of situation the warranty was meant to cover.

What the Court said

The judgment runs to hundreds of paragraphs, but three key issues stood out:

1. What counts as “disclosed”

   The SPA said the buyer could not claim for breach of warranty if the relevant facts were “fairly disclosed”. The court ruled that only information set out in the formal disclosure letter or uploaded into the agreed data room counted. General knowledge, conversations, or hints at due diligence meetings did not qualify.

2. “Fair disclosure” means clarity, not clues

   The sellers argued that a risk flagged in a “RAG report” (red/amber/green status) was enough disclosure. The court disagreed. Simply pointing to documents and leaving the buyer to work things out was not sufficient. To protect themselves, sellers need to give specific, clear, and accurate disclosure of problems.

3. Damages depend on value at the time of sale

   The measure of damages was the difference between the company’s value as warranted (what the buyer thought it was buying) and the true value (once breaches were factored in). Later improvements or declines in the business do not change that calculation.

Why this case matters for sellers

If you are selling your business, this case shows how disputes arise and what you can do to reduce the risk:

• Be precise in disclosure

  Do not assume the buyer will “read between the lines”. If there is a problem with a contract, client, or financial assumption, spell it out clearly in the disclosure letter. Vague references or hidden documents in a data room may not protect you.

• Understand your warranties

  Warranties are not just boilerplate. They are binding promises about your company’s health. If a warranty is not strictly true, it must be disclosed. Otherwise, you could face a claim for damages years later.

• Keep a paper trail

  Oral explanations at meetings are rarely enough. Make sure disclosures are documented in the agreed format so there is no debate later about what was said.

• Expect buyers to claim

  Even if you acted honestly, buyers often use warranty claims after completion to claw back some of the price. This case shows how aggressively they may pursue them. A well-prepared disclosure process is your best defence.

Final thoughts

Selling a business is about more than just agreeing a price. The warranties and disclosure process are just as important as the headline deal. The Atten Bidco case underlines that sellers who cut corners, rely on informal chats, or assume the buyer “knows” the risks, leave themselves dangerously exposed.

If you are preparing for a sale, invest the time in a thorough disclosure exercise. It may feel tedious, but it could save you millions in a dispute later.

I help buy and sell businesses under £10m – if you need help, get in touch today.