Drafting Buy/Sell Agreements for Closely Held Companies - Part 1

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Description

There is rarely a liquid market for the sale or exchange of ownership interests in closely-held companies. Buy/sell agreements fix that problem by creating a market among the owners of a company, providing a mechanism for owners to liquidate their interests in a reliable manner. The owners may agree to buy and sell interests among themselves on the occurrence of certain events and using certain valuation metrics, or they may agree that the company itself will redeem an owner's interest.

Without these agreements, there is often no alternative for an owner to cash out, short of liquidating the company.

This program provides a practical guide to the different types of buy/sell agreements, drafting the essential provisions of each, and common negotiating and drafting tips.

Part 1 topics include:

Types of buy/sell agreements – cross-purchase among owners, entity redemption, and hybrid approaches
Most highly negotiated provisions of buy/sell agreements
Triggering events – voluntary sale, retirement, death, bankruptcy of shareholder or member
Valuation of interests – appraisals, formula clauses, comps, and dispute resolution
Rights of first offer v. rights of first refusal, and sales to third parties

Contributors

Daniel G. Straga

Daniel G. Straga is an attorney in the Washington, D.C. office of Venable, LLP, where he counsels companies on a wide variety of corporate and business matters across a range of industries. He advises clients on mergers and acquisitions, capital raising, venture capital, and governance matters. Mr. Straga earned his J.D. from the George Washington University Law School and his B.A. from the University of Delaware.

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Thank you

Description

Contributors

Daniel G. Straga