When one partner fails to respond to a notice of breach from the other partner, the relationship may be so damaged that dissolution is required. Courts may apply the ‘not reasonably practicable’ standard in determining whether a business can continue in its present form. The ‘not reasonably practicable standard’ is…
Exit planning describes the process of preparing a closely held business for the exit of its owners at its maximum value. It is the preparation and implementation of a plan that maximizes the current and future value of the business. Exit planners help owners understand the true value of their…
Arbitration agreements survive the termination of an underlying contract, unless the parties specifically terminate the arbitrate provision. In disputes involving closely held businesses, the arbitration agreement may be invoked even if the business is no longer in existence. Unless there is a specific agreement on the question of ‘arbitrability’ of…
The application of a control premium more than doubled the claimed value of a business purchased its employees through and ESOP An investment banking firm involved in the transaction is subject to claims that it was biased because the fee it earned was contingent on the purchase price. The valuation…
An arbitration clause in a is unlikely to be enforceable against a beneficiary unless there was to consent to arbitrate; it is unlikely to be inferred from the will alone. An arbitration clause imposed as a condition of accepting the benefit of a trust is more likely to be enforced…
The fiduciary duties of loyalty and care may be different when a partnership is involved, rather than a corporation. The duties that shareholders in a corporation owe to each other are different than those owed in a partnership. Shareholders have more discretion to consider their own interests first. Understanding the…
Understanding the valuation of the business is critical to the owners of closely held business in planning and management. Closely held business owners typically have most of their personal wealth tied up in their company, but rarely know the current value of the enterprise. Current valuation data is important for…
Agreements that limit former employees from soliciting customers or disclosing confidential information are critical to protecting the value of a closely held business. Restrictive covenants and non-compete agreements are difficult to enforce and must be carefully drafted to assure that they are enforceable. …
Intangible Capital are the elements that define a company’s real earnings capacity and its value. The Exit Planning Institute recognizes four intangile capitals in a business: human capital, structural capital, customer capital and social capital. Intangible capital is closely tied to the intangible assets of a business, which commonly represents…
It’s a decision involving a law firm partnership that, if widely followed, will likely have a sweeping effect on the interpretation of the statutory requirement for unanimity in adopting critical agreements that govern partnerships and liited liability companies. Attorney Andrew Zidel, an attorney who left prominent intellectual property boutique firm…