They were a relatively new client and had retained me to help them seek out groups that they could acquire.  And, then the phone call came:  they wanted to liquidate their partnership and have one partner buy out the other.  They asked me to facilitatie the buyout.


Even to this day, they are one of the best groups I’ve worked with:  they liked and respected each other, paid their vendors early, had great clients and served their clients well. They treated their employees with respect.  It appeared to be a model partnership.


I pride myself in being sensitive and fair when it comes to a group dissolving or merging with another group.  When one is talking about a simple partnership breaking up, it’s not really that simple.  Historical earnings, gross margin, what was brought in, what was won and by whom, all play a role in trying to determine fair value beyond the equity value on the balance sheet.

After several weeks, we had agreement from both parties.  I felt very comfortable with the document from the attorney and the liquidation process (I have a special attorney relationship that I cherish.  He lets me write the draft and then he cleans it up!  It reduces my client’s attorney fees and allows me to keep the people issues front and center; not just a money deal).

I met the partner who held the greatest number of shares at a local restaurant late in the afternoon.  He and his wife were sitting at a table drinking tea.  Although he was the majority owner, he was willing to walk away from the client relationships and start over.  And, then…another surprise.  His wife asked an interesting question:  “If it is a good deal for both parties,then, if we decided to keep it, wouldn’t it still be a good deal for the other partner as well?”  Needless to say, I was taken back.  I paused, expressed kind of a nervous, awkward giggle and said, “yes, it should be.”  The husband and wife then said, “well, we want to keep the agency.”


I went back to my office and called the other partner, who thought by the end of the day that he would be moving forward with the client relationships and single ownership.  After I told him that his partner did not want to sell but was interested in buying him out (instead), he, too, expressed a nervous, awkward giggle and said, “well…if it was a good deal for both parties, then it is still a good deal for me.”  He signed the papers later that night.  All we did was change the name of the buyer and the seller…and, that was it.


I have come behind many acquisitions/mergers that were poorly done.  Hard feelings, law suits or threats of law suits occurred.  I have a series of tests and intuitive guidelines that I ask both parties to consider in processing their buy/sell agreement.  If you find yourself in a similar situation someday where you can benefit from some sage advice and counsel, I would like to help you.