CONFIDENTIALITY IN THE SALE OF YOUR BUSINESS
An asset purchase agreement crossed my desk recently with a provision that allowed buyer to post a notice on the door that there was a pending transfer of the business.
Also included in buyer's proposed purchase agreement was a provision obligating seller to maintain all customers, vendors, and employees or buyer can terminate the contract.
Upon review, it appears to me that this buyer was setting up seller to force the seller out of business so that buyer did not actually have to pay any money to eliminate its competitor.
It is critically important that confidentiality be maintained during the pendency of the transaction. There are many ways to do this:
Marquis Aurbach Coffing is a full service firm and can answer specific questions in more detail. Please do not hesitate to contact us.
- Prior to discussions on the drafting of the transaction documents, have in place a non-disclosure, confidentiality, and non-circumvention agreement;
- Set rules on buyer's visitations to the business, as it will become clear to employees that something is up if the same "suits" walk in weekly/monthly; and
- Consider setting up separate email accounts and fax accounts for the transmission of confidential documents between your team (lawyer, accountant, and financial planner) and you as the principal seller of the business.
Ms. Drury is a Shareholder in the firm of Marquis Aurbach Coffing in Las Vegas, Nevada, and is chairperson of their transactional department. Drury was named a Leader in the Field of Real Estate for 2011 and was also named by Best Lawyers in America in the specialties of Corporate Law and Real Estate Law for 2011. Ms. Drury's practice focuses on transactions, with an emphasis in real estate. She documents and oversees entity formation, land and business acquisition, construction agreements, loans (construction and permanent), general operational and contract needs, and the ultimate sale of land or improved properties and businesses. Ms. Drury serves on the Executive Committees of the State Bar of Nevada's Real Property Law Section and Business Law Section, which, among other things, draft statutes for consideration and adoption by the legislature of the State of Nevada. Prior to joining Marquis & Aurbach, Ms. Drury served as Associate General Counsel at Station Casinos, Inc. Ms. Drury has a Bachelor of Arts in International Relations and Print Journalism from the University of Southern California, with a minor in Business Administration. She has a Juris Doctor Degree from the University of California, Hastings College of the Law.