Legal Blog

M & A Nuggets: Purchaser – Beware Of The Lone Wolf

business-dealAs purchaser of a business, you need to be certain that the sale of the business has been authorized as required by law and by the seller’s organization documents.  This usually is a straightforward task, but can be problematic when there is a lone wolf owner of the seller who has distanced himself from the business.  Corporate statutes in all states set forth the percentage vote required to approve a sale transaction.  Some states allow a company’s corporate documents to change the statutory percentage.  When purchasing a business, you need to understand the percentage vote required and make sure that the seller presents proof to you of obtaining that vote.  A disgruntled uncooperative owner who has distanced himself from the business (i.e., a lone wolf) may hold enough ownership to block the sale.  It is important that you understand the ownership structure of the seller at the inception stage of the negotiations.  Otherwise, a lone wolf owner who surfaces near closing could not only interrupt, but also hold up, the closing.  Worst yet, if you closed on the purchase without the requisite vote of the seller, the lone wolf owner could attempt to upend the sale.


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Glenn D. Solomon Esq., is a principal at the law firm of Offit Kurman and has provided counsel to businesses and business owners for more than twenty-five years, with extensive experience in the purchase and sale of businessesstructuring ownership agreements, and advising companies in financial distress






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