A Review of Buy-Sell Agreements: Ticking Time Bombs or Reasonable Resolutions?
Review written by L. Paul Hood, Esq. Published in Steve Leimberg's Business Entities Newsletter, Issue 119, February 13, 2007. Courtesy: Leimberg Information Services, Inc. (LISI) at www.leimbergservices.com
This is a review of the newly written book by Chris Mercer, Buy-Sell Agreements: Ticking Time Bombs or Reasonable Resolutions? (Peabody Publishing Memphis 2007), available through Peabody Publishing, L.P. (800.769.0967) or through Mercer Capital at www.mercercapital.com.
The book offers a fresh look at buy-sell agreements through the lens of the business appraiser, who too often enters the picture after, as the book states, "the ox is in the ditch." Buy-Sell Agreements discusses in-depth the pricing and valuation provisions of buy-sell agreements, arguably the only important provisions, especially once a triggering event has occurred. However, this book also is written from the viewpoint of someone who has signed buy-sell agreements and who has had significant experience in dealing with signed buy-sell agreements. Mercer's experience shines throughout the tome.
To summarize Buy-Sell Agreements in one word, that word would be "methodical." Mercer focuses like a laser beam on virtually all of the possible permutations of the pricing and valuation provisions of buy-sell agreements, together with the advantages and disadvantages of each. Too many of the buy-sell agreements that I see have valuation methods that have far more disadvantages than advantages.