CASE STUDIES

UTAH FAMILY ENTERPRISE NEEDED GUIDANCE AND REPRESENTATION TO SELL BUSINESS

PRACTICE AREA: BUSINESS TRANSACTIONS & CORPORATE GOVERNANCE

BACKGROUND

A buyer approached a decades-old family business that consisted of multiple retail store locations, which the seller also owned. The buyer offered to purchase both the operating retail business and the commercial real estate on which the different business locations were operated. Our law firm attorney represented the seller. The challenge in this transactions was that the buyer group had no personal experience in that particular retail business industry, and it needed the seller’s cooperation in providing a significant amount of seller financing to complete the transaction, which was worth several million dollars. These were significant risks to the seller client, and are risks that selling business owners frequently face.

LEGAL STRATEGY

Because the buyer was inexperienced in the seller’s retail industry and was relying on seller financing to pay for the business, we were very careful to draft the sale contract to protect the seller in case the buyer either couldn’t successfully operate the business or failed to make payments to the seller timely. Unfortunately, and as feared, after purchasing the business, the buyer soon proved incapable of running the business profitably and failed to make timely payments to the seller. However, because of the special custom-drafted sale contract terms the Richards Brandt attorney included the sale contract to protect the seller, the seller quickly recovered ownership of the business, and was able to sell it to a different and much more capable buyer. The seller did not sustain any significant financial loss due to the first buyer’s purchase.

If you are considering the purchase or sale of a business, contact the business law attorneys at Richards Brandt to discuss how we might help you achieve a successful transaction.

REVIEWS

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