How our Commercial Law services help in a divorce
A Buy-Sell agreement that we prepare can include two types of exits: Voluntary and Involuntary.
It’s a matter of defining what those involuntary triggers are. They generally include death, injury, and illness — events that can be insurance funded.
They can also include other triggers: family breakdown, addiction, and a number of others that can lead someone to say, “I don’t want to be in business with you, or I can’t be business with you”.
The breakdown of the relationship presents an option to buy out the departing person’s interest. It’s an option because it needs to be funded.
There also needs to be a mechanism that defines how to value the business.
Let’s say the business is valued at “X’.
A partner’s share can then be bought out for ‘Y’ dollars and life goes on.
There can be different valuation methodologies for say, voluntary or involuntary departure, or whether you are a good lever or a bad lever. There are all sorts of ways we can deal with it.
Divorce in business can certainly have a massive impact. A business can be exposed to years of unpleasant litigation, valuation and otherwise because of a key person’s marital breakdown.
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