Buy-Sell Agreements: Ticking Time Bombs or Reasonable Resolutions

Buy-sell agreements are legal contracts. What is not clearly understood, however, is that they are also business and valuation documents. As important as buy-sell agreements are, many are created almost as an afterthought, particularly from the viewpoint of shareholders/investors in private businesses. The parties to the agreement often do not take sufficient time to understand the exact nature of the agreement, how it will work in the future, and the implications for them (whether they will be a buyer or seller in future transactions) - despite the best efforts of a corporation s counsel. This book about buy-sell agreements, written by a business appraiser and businessman, helps both the corporation and its shareholders understand their buy-sell agreements by helping the reader ask and answer: Will the existing design and operation of your buy-sell agreement accomplish your business objectives? If a trigger event occurs, will the valuation mechanism in your buy-sell agreement accomplish the objective of providing a then-current price for the company s stock at the level (the kind of value) you and your partners/shareholders/investors agree to be reasonable? Buy-Sell Agreements: Ticking Time Bombs or Reasonable Resolutions? discusses the advantages and disadvantages of formula and fixed price agreements, single appraiser and multiple appraiser process agreements. The book also details the six defining elements of a buy-sell agreement. If your buy-sell agreement is absent (or unclear on) any of these defining elements, upon a trigger event, the result might be expensive and prolonged negotiation or litigation to get to a resolution. In addition, the book contains a Buy-Sell Audit Checklist to assist shareholders, corporate officers and their advisors in negotiating business and valuation issues relating to buy-sell agreements. This book is written to help business owners, attorneys, insurance professionals, business appraisers, and other profession