USA – NEW YORK Trends and Developments Contributed by: Konstantine Paschalidis, Michael Iakovou and Socrates Xanthopoulos, IX Legal
the action. The outcome in this matter, while optimal under the circumstances, stood to benefit from an enforceable forced buyout provision. If the sharehold - er agreement presented the client with the opportunity to buy out his partner upon certain conditions outlined in the petition for dissolution, with a binding arbitration provision, the company could avoid the risk that its clients would learn of the upheaval at the top. Executing an enforceable buyout Working hand in hand across the relevant depart - ments, the firm finalised the family’s amendment to ensure the group and its portfolio’s continued surviv - al in the face of any anticipated adversity. Our team crafted a fair vehicle, with objective valuations and a triggering mechanism to avoid the pitfalls learned from experience and through research. The amended oper - ating agreement contained express binding arbitration language, ensuring the parties’ option to keep their issues outside of the courts. After explaining the new system in detail, the clients expressed relief that their vigilance guaranteed the survival of their grandpar - ents’ efforts. The potential issues of the next genera - tion must take place within a new framework designed to continue the legacy of the original generation, give fair value to any aggrieved members, ensure leader - ship remains with the most capable, and keep drama out of the public eye. While predicting the cost savings for these particular clients requires omniscience, we can confidently report that the cost to prepare and execute the amendment to the operating agreement remained less than 1% of a hotly contested litigation and from that time forward all parties to the agreement and their successors maintain a better understanding of their rights and responsibilities vis-à-vis the buyout clause.
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