CASE STUDY
FOCUS: Corporate Law & Governance

GCT Creates Unique Buyout Plan That Puts Family First

CHALLENGE
A client who owned a family business with a sibling for over 25 years, came to GCT seeking help planning a buyout plan of the other’s stake in the business. This in itself is not unusual, however, the amount of money agreed upon for the buyout posed an unconventional situation as the purchase price would exceed the current value. Before moving forward, GCT took the time to ensure that the client fully comprehended that this was not necessarily a favorable economic scenario. Our client understood and appreciated the concern, but still requested that GCT structure the deal accordingly.

STRATEGY
At GCT, helping clients achieve their goals while providing a high level of personal service and care is at the heart of our work. We needed to devise a buyout plan that took into consideration this client’s family dynamic and the complexity of safeguarding the interests of both parties. After listening to the client and understanding how important it was to address this special circumstance, we used both our legal and financial expertise to design a multi-year buyout plan – and created a formula to manage the process, including taking into account any potential catastrophic events – that would ensure the desired outcome for the entire family.

RESULTS
The resulting buyout plan GCT created is certainly unique, and it accomplished the client’s goal – the sibling selling will retain an ownership position while getting paid incrementally and the one buying will secure the full value of the payout when the full term of the plan is realized. At GCT, we stand by our philosophy of putting our clients first, and in this case, the client was more interested in putting their family first over financial gain – a position we fully respect.