Welcome to this book! All nonfiction book authors have different reasons for writing books. Sometimes, it’s purely to make money; other times, it’s the recognition that the world would be well served by a good book on the subject. In part, I fall into the latter category, because there is no really good book on buy-sell agreements for the lay audience. But that’s not the principal reason why I was driven to write this book.
For me, the principal motivator for writing this book was personal. My family was forced out of our two-generation family business due, in large part, to deficient buy-sell language. It changed the lives of my uncle and my maternal grandfather forever.
This happened when I was still quite young, but I recall hearing snippets about it around the dinner table. Unfortunately, by the time I became a lawyer, my grandfather was deceased, and I never had a chance to discuss the ordeal with my uncle—who was fired from the company by the son of my grandfather’s partner in this ordeal, and he had died too. It wasn’t until after I became a lawyer that I was able to investigate the corporate records on file with the Louisiana Secretary of State to determine what really happened.
My grandfather was bought out for book value (the value of the assets of the business as per the accounting books and records), which was far less than what his stock was worth—as is usually the case. The corporate documents provided for book value redemptions, which I counsel strongly against. The silver lining for my family in the ordeal—which really disrupted my family for a good while—was that the son of my grandfather’s partner eventually drove the business into Chapter 7 bankruptcy. This meant that my family was the only family to get any wealth out of that company. Karma, I guess.
I wrote this book for you so that you can protect yourself and your family. Now, unrelated business owners of closely held entities also really need the protections afforded by a well-drafted buy-sell agreement. However, I didn’t write this book, nor do I intend for it to be used, for you to draft your own buy-sell agreement—that would be a huge mistake. I intend for you to use this book to educate yourself (and many professional advisors) on buy-sell agreements so that you can assist your lawyer in crafting the right buy-sell agreement for your situation.
Some of the material in this book is complex. Why? Because the tax laws are unnecessarily complex. However, I have labored long and hard to make it as simple and as painless as possible. But where it is complex, you can thank your federal elected officials for enacting such byzantine tax laws.
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