Rights of first refusal are used to maintain stock within specified groups of shareholders, and particularly with family businesses. This post explains their purpose in the context of buy-sell agreements.
Buy-sell agreements are prevalent throughout Corporate America. Every successful enterprise with two or more owners has, or should have, a buy-sell agreement. Too often, however, buy-sell agreements are created and signed without adequate discussion among and between the owners (shareholders, partners, members, or joint venture participants). Why is this? It can be difficult to talk […]
Tom Deans has written an excellent book for all business owners and their advisers. The title is Every Family’s Business. With a title like that, you won’t be sure if Tom is talking about your family’s business, or your family’s business. But it won’t take long to find out. Clearly, Tom Deans is talking about […]
Chapter One of my book, Buy-Sell Agreements for Closely Held and Family Business Owners, is entitled “Your Buy-Sell Agreement Won’t Work.” When I speak of “your” buy-sell agreement, I’m referring to your agreement if you are a business owner. Readers of this blog know, however, that I also talk directly to advisers of business owners. […]
Peter Mahler’s New York Business Divorce blog provides a nice summary of my recent (6 parts so far) posts on statutory fair value. Peter begins his review: By statute in New York and many other states, including Delaware, the standard of value used in dissenting shareholder appraisals and buy-outs in corporate dissolution proceedings brought by minority […]
I recently received my first issue of a new newsletter, Dunn on Damages: The Economic Damages Report for Litigators and Experts. … What I can tell you is that the two articles in the first edition were worth far more than the year’s $199 subscription price.
In the last two posts in this series, we have addressed two of at least three issues that are not easily addressed in the context of the traditional levels of value concepts in statutory fair value determinations. Determining the proportionate interest in a going concern The applicability of “implicit minority discounts” in Delaware fair value […]
In the last post, we talked about the concept of the proportionate share of the value of a going concern that has deep roots in Delaware statutory fair value case law. In Delaware, where the discounted cash flow method is the favored valuation method, the proportionate interest in a going concern is defined by the […]
There have been three posts thus far in this series on Statutory Fair Value. The first post introduced the topic of statutory fair value and provided the statutory definition of fair value in Delaware. Fair value is defined in Delaware Code Annotated Section 262(h) as (with parenthetical numbers and emphasis added): After the Court determines the […]
We started our discussion of statutory fair value with an introduction (#1 Introduction) and followed that with a discussion of the DCF valuation method (#2 Discounted Cash Flow (DCF) Method). We now turn to the levels of value charts that are at the heart of every valuation decision made in statutory fair value determinations, either […]