Engagement

We were engaged by a shareholder to:

- Advise on value of shares

- Structure the sale of shares

- Assist in negotiation with the other shareholder

 

Background

A 50% shareholder in a private company wanted to sell his interest. The shareholders’ agreement did not provide a mechanism for the sale of shares and the shareholders were unable to come to an agreement in terms of the value of the shares and how to structure a buy out.

The selling shareholder had commenced an action to wind up the company and litigation was moving forward, but the parties were still trying to negotiate and settle the matter outside of court.

 

Analysis

The value of the business was comprised of the operating business and real estate that had significantly increased in value. The valuation of the shares needed to consider the real estate value, the value of the operating business, the role each of the shareholders played in the operating business and the tax implications of the deal.

 

Our Role

We provided memos and verbal advice that explained the issues in understandable terms and outlined the goals of a settlement. We determined the value of the shares and provided the seller with a strategy to negotiate a settlement. We attended meetings between the parties and structured a settlement that was fair to both sides.

In emotionally charged situations, we objectively and rationally evaluate the needs of both sides. This helps us to align competing interests and structure settlements that are fair to both sides. We listen, consider and strive to bring appropriate solutions to complex problems.

 

Results

The parties were able to avoid delays and fees by settling outside of court using our proposed framework.