How to Track a Tip Basket (First-Dollar Indemnity Basket)

How to track a tip basket is a first-dollar (also called a tipping basket or dollar-one basket) indemnity-threshold ledger from signing through claim notices, not a general basket-tally tab and not a deductible-basket tab. For each signed deal, log whether the basket is tipping / first-dollar / dollar-one or something else, the threshold copied from the PDF, the first-dollar arithmetic once the threshold is crossed, the listed exceptions, how deductible-majority prints sit on the deductible page, how the row overlaps with indemnity-basket-tracking, and status. Raziel's indemnity basket tracking page is the general tally. This page is the tip / first-dollar / dollar-one basket.

This is not legal, tax, insurance, or investment advice. Raziel does not provide it. Copy the tip-basket (first-dollar / dollar-one) sentence from the PDF. Do not invent a 2025 tip-prevalence percentage when the sources below print deductible share rather than a 2025 tip share, and do not paste deductible medians onto this first-dollar row.

What this ledger is (and is not)

A tip basket, also called a tipping basket, a first-dollar basket, or a dollar-one basket, is a threshold that, once crossed, lets the buyer recover covered losses from dollar one (subject to the cap and carve-outs), rather than only the excess above the threshold. Goulston and Storrs, What's Market: Indemnity Baskets (JDSupra, September 13, 2024), defines deductible versus tipping / first-dollar / dollar-one, notes that deductibles have become increasingly common (2/3 to 3/4 of transactions in recent studies), and lists the most common basket exceptions as fundamental representations, standalone indemnities, and covenants. The ABA 2023 sample in that recap is 108 deals, purchase prices $30M to $750M. Morse, What's Market: Indemnification Caps and Baskets in M&A Transactions (September 25, 2024), citing the ABA Private Target Study covering full-year 2022 and Q1 2023, reports a majority deductible (67%), and that all RWI-referenced deals in that snapshot had deductible baskets. Keep 67% labeled Morse / ABA 2022 to Q1 2023 snapshot. Do not invent a 2025 tip-prevalence percentage from those deductible-share prints. Inkvex, Indemnification Cap and Basket, recapping ABA 2025 (n=139), prints all-baskets median 0.42% of deal value (mean 0.53%), deductible median 0.30% (mean 0.52%), and first-dollar / tipping median 0.50% (mean 0.57%). Label those as an Inkvex recap of ABA 2025. Keep deductible medians on deductible-basket-tracking. Keep first-dollar medians on this page. The ABA 2025 US sample frame (K&L / BLT) is 139 agreements, $25M to $900M, 42 simultaneous / 97 deferred. Those are study snapshots. Your indemnification article controls.

This ledger is not indemnity-basket-tracking (the general tally of type, threshold, and running aggregate), not deductible-basket-tracking (buyer absorbs up to the threshold forever), and not indemnity-cap-tracking (the ceiling). A partial-tipping basket is a different book than a true first-dollar tip.

Seven columns on one row

Open one row per signed deal. Attach the indemnification article and pointers to the general basket tally and the deductible page.

• Type copied. Tipping / first-dollar / dollar-one, deductible, partial tipping, or none. Goulston defines deductible versus tipping / first-dollar / dollar-one. Morse: majority deductible (67%) in the 2022 to Q1 2023 snapshot; all RWI-referenced deals in that snapshot had deductible baskets. Goulston: deductibles 2/3 to 3/4 of transactions in recent studies. Do not invent a 2025 tip-prevalence %. Copy the signed type.

• Threshold copied. Dollar amount or percentage of purchase price. Inkvex recapping ABA 2025: first-dollar / tipping median 0.50% of deal value (mean 0.57%). All-baskets median 0.42% (mean 0.53%) is context. Keep deductible median 0.30% (mean 0.52%) on the deductible page. Your number is the only number that belongs here.

• First-dollar arithmetic. Once the threshold is crossed, recovery (subject to the cap and carve-outs) includes amounts below the threshold, from dollar one. Copy whether the PDF pays from dollar one, pays a stated proportion (partial tipping), or pays only the excess (that last one is a deductible, not this row). Do not invent a Study percentage for this limb.

• Exceptions copied. Goulston: most common basket exceptions are fundamental representations, standalone indemnities, and covenants. Copy the listed exceptions. Do not invent a 2025 exception percentage.

• Deductible-majority pointer. Pointer only. Goulston 2/3 to 3/4 and Morse 67% are deductible-share prints. Keep those on deductible-basket-tracking. Mark whether this deal is the tip minority or a deductible. Do not rewrite that page.

• Overlap pointer to indemnity-basket-tracking. Pointer only. That page is the general tally (type, threshold, claims that count, running aggregate, remaining room). This row is whether the basket, once met, tips to first dollar. Mark the pointer.

• Status. Copied, claim noticed, threshold crossed, first-dollar argued, disputed, settled, or closed. When a claim cites this basket, book the date and whether the fight is type or threshold.

Copy the clause, not the study percentage

Do not paste 0.50% onto a silent or deductible paper. Do not invent a 2025 tip-prevalence percentage when Goulston and Morse print deductible share (2/3 to 3/4; 67%) rather than a 2025 tip share. Do not paste deductible median 0.30% onto this first-dollar row. Do not fold this row into indemnity-basket-tracking, deductible-basket-tracking, or indemnity-cap-tracking. The general tally is the running aggregate. Deductible arithmetic is buyer-absorbs-forever. The cap is the ceiling. This row is whether the basket tips to first dollar once the threshold is crossed.

When a post-close claim arrives, log whether the PDF used a tip / first-dollar / dollar-one basket, the threshold, and whether exceptions took the claim outside the basket. That trail is what indemnity counsel will ask for first.

When the ledger holds

The row holds if the seven cells are copied from the PDFs (or marked missing). It fails when you invent a tip basket, invent a 2025 tip-prevalence %, paste 0.30% onto this row, or treat the general tally tab as if it answered the first-dollar question. Raziel's alternative asset dashboard is where the tip-basket sentence, the threshold, and any claim notice should sit together. Raziel does not decide your basket dispute. Copy the seven columns.