Why There is a Need for a Buy-Sell Agreement among Business Owners

What is the market value of Arizona Beverage Co., the maker of Arizona iced tea? A New York judge will decide the valuation question soon since the company’s founders have been unable to agree on value. The founders have been in a lawsuit for over 4 years on the issue of valuation. One of the reasons for the dispute was due to a prior agreement between the founders that said neither could sell their shares without the other’s consent. Another likely reason is there was no further agreement on the method and manner of company valuation. The gap between the founders’ opinion of value are wide, kind of like the Grand Canyon. One side believes the value is $500 million and the other believes the value is $3-4 Billion.

This story puts a spotlight on a need for an agreement among business owners, commonly called a “buy/sell” agreement. These agreements can bring clarity and consensus to valuation, avoid surprises and deter litigation which costs time and money. If your business does not have one, or it has one but has not been looked at for some time, contact me for a check up on your succession plan. We can review your existing agreement if you already have one and either amend it or create one that is customized to your business. Call (480) 664-7728 today.

Buntrock Law Group in Mesa ArizonaPublished By:

Buntrock Law Group, PLLC

2158 N. Gilbert Road, Suite 119
Mesa, AZ 85203

Phone: (480) 664-7728
Email: info@buntrocklaw.buntrockharrisongardner.com