2020 Drafting Buy/Sell Agreements for Closely Held Companies, Part 1 Audio Replay

Originally presented on June 11, 2019

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 will provide you with a practical guide to the different types of buy/sell agreements, drafting the essential provisions of each, and common negotiating and drafting tips.

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

Speakers: Peter Bloom, The Bloom Group and Norman Lencz, Venable, LLP, Baltimore, MD