New York’s Largest Corporate Dissolution | AriZona Iced Tea
Buy-sell agreements are critical corporate documents. I’ve said that many times and in three books on the topic. This post is about a case in which the parties did not have a buy-sell agreement. They were involved in litigation over the buyout of one 50% owner (not in management) by the other (in management). There was a trial and, following the trial, a private settlement. I was involved in the case and so now am providing an analysis of the case. The text of the analysis begins:
After several years of litigation involving a number of hearings and trials on various issues, a trial to conclude the collective fair value of a group of related companies known as the AriZona Entities occurred.
The Court’s decision in the AriZona matter was filed on October 14, 2014. I have not written about the AriZona matter because I was a business valuation expert witness on behalf of one side. The parties recently closed a private settlement of the matter, so there will be no appeal.
View Analysis of Case >
With oil prices dropping briefly below $40 per barrel on Friday (August 21, 2015) and the stock market dropping sharply in the recent past, investors in the public markets are being advised not to panic. The headline for the front page of the Saturday/Sunday Edition of The Wall Street Journal (August 22-23, 2015) reads “Stock Plunge Picks Up Speed.” In light of the circumstances, what happened to the value of closely held and family business in America over the last week?
So many questions that a business owner must ask. And answer, if he or she hopes to have successful management and ownership transitions and a successful business end game that prepares him or her for the rest of life. Many of the questions are interrelated and the answers to some will influence the answers to others. I pose the following questions as a starting point for discussion between owners, their families, their key employees, and their advisers. At the conclusion of the questions, I suggest that you can begin to work on answers by examining your buy-sell agreement. That process will get you in the mode of asking and answering critical questions during the interim time between now and your business end game that will insure that you transition ownership and management smoothly and prepare for the rest of your life.
This is the second in a two-part series: Where Do You Want the Ownership of Your Company to be in 3, 5, or 10 Years? In this first post, we introduced the Ownership Transfer Matrix. In the this concluding post, we dive deeper into the ownership question.
This is the first in a two-part series: Where Do You Want the Ownership of Your Company to be in 3, 5, or 10 Years? In this first post, we introduce the Ownership Transfer Matrix. In the concluding post, we dive deeper into the ownership question.
When I read about Uber’s most recent financing, which valued its equity at $51 billion, I thought about FedEx Corporation, a Memphis-based company. I then wrote a blog post titled Uber Market Cap of Equity Exceeds that of FedEx. This past week, my thoughts about FedEx turned towards AutoZone, another Memphis-based company, as well as […]
Recently I spoke with a business owner who had almost sold about half of his company to a private equity investor a few years ago. The facts will be changed in this story so that neither he nor I should be able to recognize his company. However, the conversation highlights a potential opportunity for owners […]
This post introduces the concept of “interim time,” which is the easily lost time between two critical goal posts in the life of a business owner, his or her current status quo and their business end game. It is, after all, what we do during this interim time that prepares us not only for our inevitable business end games, but also for the rest of our lives.
The issue of whether private companies should pay dividends is an important one. Many private company business owners (and boards) resist paying dividends because they desire to retain flexibility at their companies and do not desire to incur risk from leverage (or slower ability to repay debt). The interesting thing about this position is that it creates polar opposite effects on private companies and their shareholders. What follows are ten good reasons to consider paying private company dividends and five things that some folks say represent the downside.
A decade ago, Richard Jackim and Peter Christman wrote a book entitled The $10 Trillion Opportunity. The second edition had the subtitle of “Designing Exit Strategies for Middle Market Business Owners.” While the book did provide a guide for financial advisers working with middle market business owners, I don’t recall that it provided a basis for […]
