BVR's Webinar Series
Thursday, February 12, 2015
10:00am-11:40am PT • 1:00pm-2:40pm ET
The recording and transcript for this webinar are available to subscribers:
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Valuation professionals have an important opportunity to assist clients with administering or litigating ownership agreements. This webinar focuses on the valuation implications of buy-sell agreements, including factors that influence value and selecting the method to determine the purchase price. The speakers will also discuss how the courts view buy-sell agreement disputes and they will give practical examples of disputes and eventual outcomes.
- Purpose and types of buy-sell agreements
- Buy-sell agreements and valuation engagements
- Tax purposes, IRC Section 2703
- Divorce purposes, jurisdictional considerations
- Triggering events leading to a transfer of ownership
- Potential third party sale triggers;
- Viability of owner triggers; and
- Relationship severance triggers
- Key provisions
- Purchase price determination
- Restrictions on transferability and rights of first refusal
- Employment and non-compete arrangements
- Put and call options
- Funding and terms of purchase
- Preferred returns, conversion rights, and participation rights
- Factors influencing value and selecting the method to determine the purchase price
- Methods to determine the purchase price
- Fixed price (e.g. book value);
- Agreed-upon formula (e.g. multiple of earnings) or agreed-upon methodology (e.g. market derived); and
- Valuation performed by qualified business appraiser
- Advantages/disadvantages and common practices in purchase price determination
- Ambiguity of essential appraisal elements found in buy-sell agreements
- Standard of value
- Level of value
- Valuation date
- Appraiser qualifications & appraisal standards
- Scope & methodology
- Buy-sell agreement disputes and case studies
- Results of attorney survey
- Understand the role buy-sell agreements play in protecting businesses and the interests of their owners in administering the transfer of ownership interests.
- Understand roles valuation professionals may play in assisting with the administration or litigation of buy-sell agreements.
- Understand the key provisions contained in buy-sell agreements.
- Understand the importance of periodically evaluating the provisions of buy-sell agreements in view of evolving characteristics of the business and the objectives of its owners.
- Insight into how valuation professionals may, among other areas, offer guidance on the provisions of buy-sell agreements pertinent to the determination of the purchase price upon various triggering events.
- Understand the advantages and disadvantages of alternative methods to determine a purchase price and identify common pitfalls and red flags to avoid that could lead to disputes or inequitable arrangements.
- Explore areas that valuation professionals should consider in terms of how buy-sell agreements can impact valuations for other purposes such as tax and family law.
- Discuss how the courts may view buy-sell agreement disputes and practical examples of disputes and eventual outcomes
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