Buy-sell agreements gone bad — Plan for the unexpected with a comprehensive plan
Abstract: Buy-sell agreements are legal contracts that spell out buyout terms and provisions during key ownership changes. But inadequate agreements can create problems when owners can least afford the turmoil. This article explains some of the common valuation-related mistakes owners make when setting up buy-sell agreements, including failing to define buyout terms, using ambiguous or outdated valuation formulas, and misstating or failing to verify financial data. The article emphasizes the importance of consulting with an experienced valuation professional to ensure the agreement covers all the bases.