June 2016
Buy-Sell Agreements, Part 1 and Part 2
Program Description:
There is rarely a liquid market for the sale or exchange of ownership interests in even successful closely-held companies. Buy/sell agreements, however, create a market among the owners of a company, providing a mechanism for a shareholder or member to liquidate his or her 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 buy out a shareholder or member's interest over time. Without these agreements, there is often no alternative for a shareholder or member 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.
Day 1 - June 21, 2016:
- 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 - independent appraisals, formula clauses, industry comps, and dispute resolution
- Rights of first offer v. rights of first refusal, and sales to third parties
Day 2 - June 22, 2016:
- Funding buy/sell arrangements - payouts/earnouts over time, commercial borrowing, key-man insurance, other funding sources
- Special issues involving S Corps and unincorporated entities
- Drag-along and tag-along rights in buy/sell agreements
- Major tax issues in buy/sell agreements for buyer, seller and the entity
Faculty:
Peter Bloom is the founder of The Bloom Group, where he is an experienced business lawyer, and acts as general counsel to emerging, mid-stage and family businesses, providing strategic advice as well as guidance regarding corporate law, contracts, tax, intellectual property protection, financing, succession planning and labor and employment law. He is also a highly skilled transactional lawyer, having handled mergers and acquisitions, stock and asset purchases, technology transfers, recapitalizations and other corporate reorganizations, and venture capital investments. Mr. Bloom earned his A.B., magna cum laude, from Duke University, his J.D. from the University of Connecticut School of Law, and his LL.M. from Georgetown University Law Center.
Norman Lencz is a partner in the Baltimore, Maryland office of Venable, LLP, where his practice focuses on a broad range of federal, state, local and international tax matters. He advises clients on tax issues relating to corporations, partnerships, LLCs, joint ventures and real estate transactions. He also has extensive experience with compensation planning in closely held businesses. Mr. Lencz earned his B.S. from the University of Maryland and his J.D. from Columbia University School of Law.
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