A financially stressed seller in an otherwise viable industry may present an opportunity for you to acquire a business at a very reasonable price. The seller may be so financially stressed that the normal amount of time that it takes to negotiate and close an acquisition simply does not exist. In this scenario, an interim management agreement may work. The Seller may be willing to allow you to manage its business on an interim basis pending closing on the purchase. You should protect yourself during this interim period by taking the following steps: (1) secure a binding agreement from the seller to sell you the business, while allowing you the ability to conduct due diligence and to decline to proceed with the purchase if you are not satisfied with the results; (2) make clear exactly what obligations of the business you are agreeing to pay; and (3) make sure that you have sufficient control over the business during the management period so that the seller cannot interfere with the operations. By taking the steps outlined above, you could salvage a declining business, reverse its fortunes and secure the benefit of that in the future.
ABOUT GLENN D. SOLOMON
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 businesses, structuring ownership agreements, and advising companies in financial distress.
ABOUT OFFIT KURMAN
Offit Kurman is one of the fastest-growing, full-service law firms in the Mid-Atlantic region. With over 130 attorneys offering a comprehensive range of services in virtually every legal category, the firm is well positioned to meet the needs of dynamic businesses and the people who own and operate them. Our ten offices serve individual and corporate clients in the Maryland, Delaware, New Jersey, and Northern Virginia markets, as well as the Washington DC, Baltimore, Philadelphia, and New York City metropolitan areas. At Offit Kurman, we are our clients’ most trusted legal advisors, professionals who help maximize and protect business value and personal wealth. In every interaction, we consistently maintain our clients’ confidence by remaining focused on furthering their objectives and achieving their goals in an efficient manner. Trust, knowledge, confidence—in a partner, that’s perfect.
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