134 THE US-ISRAEL | Legal Review 2025/26 through layered placements. Over time, this product has become an integral component of modern M&A structuring, embedded directly into deal architecture and treated as a standard workstream alongside legal, financial, and tax diligence in both private equity and strategic acquisitions. Yet the traditional model requires that the seller has provided material representations in the acquisition agreement. In certain deal environments, that assumption does not hold. Where sellers are unwilling or unable to provide meaningful business warranties, a more advanced structure becomes necessary. That structure is synthetic representations and warranties insurance. For which types of M&A transactions or deal structures would synthetic R&W insurance be appropriate? Although representations are a material element of most private M&A transactions, there are circumstances in which sellers provide minimal or no operational representations. These situations arise not as anomalies, but as predictable outcomes of specific commercial pressures and structural realities. Distressed transactions are perhaps the most prominent example. When assets are sold by a courtappointed administrator, receiver, or liquidator, the seller is often unwilling or legally unable to provide business representations beyond title and authority representations, which confirm that the seller legally owns the shares or assets being sold and has the proper corporate power and approvals to validly enter into and complete a transaction. The fiduciary’s mandate of such a position is to maximize value for creditors, not to assume liabilities that may survive closing. In such contexts, comprehensive representations are commercially unrealistic and are usually not provided. Public M&A transactions present a different dynamic. In public-to-private acquisitions, representations may be constrained because target shareholders are numerous and dispersed. The buyer relies primarily on publicly available disclosures, audited financial statements, and securities filings. The mechanics of shareholder approval and disclosure obligations limit the scope of indemnification frameworks typically seen in private transactions, up to the point of no indemnification at all. Private equity fund wind-down scenarios create another context in which representations may be limited. As funds approach the end of their lifecycle, general partners seek to distribute proceeds and close out the vehicle. Long-tail indemnity exposure complicates distribution waterfalls and may require reserve mechanisms inconsistent with fund economics. Competitive auction processes can also result in minimal seller representations. Where multiple bidders compete for a high-quality asset, sellers may leverage market dynamics to demand “no indemnity” or “zero recourse” structures. Buyers seeking to remain competitive may accept limited representations as part of their bid strategy. The commercial motivations underlying these scenarios are consistent. Sellers seek to eliminate liability, preserve capital efficiency, and avoid contingent exposures. Buyers, conversely, remain exposed to unknown preclosing risks. Without representations, the buyer lacks a contractual hook for post-closing claims. This imbalance may give rise to a fundamental risk allocation challenge. We argue that synthetic R&W insurance is precisely designed to address this challenge. The mechanics of synthetic structures Synthetic R&W insurance represents a structural innovation within the broader transactional risk market. Unlike traditional R&W policies, which insure representations contained in the acquisition agreement, synthetic coverage introduces an independent schedule of representations directly into the insurance policy. Under a synthetic structure, the acquisition agreement may contain only fundamental representations, such “There is significantly more insurer appetite to support less-standard structures of Israeli M&A or investment transactions than before.”
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