Legal Question in Wills and Trusts in Minnesota
buy-sell agreement
a son wants to buy his father's
interest in 5 newspapers they own
together. With all papers the father
and son have other managing
partners. The son also has 6 other
siblings. Upon the death of the
father, the son wants to take over
his father's stock. All are ''S'' corps.
The son is willing to pay fair market
price for each paper, agreed to by
both the father and son. The son
wants to set it up so that profit from
the businesses pays for the total
purchase price over time -- the son
wants to set it up so that a
minimum of 25% of the profit
generated from his father's stock,
which he now owns, goes to pay off
his other siblings. Can this be set up?
Does an interest rate have to apply
to the stock purchase to pay off his
siblings or can it be a non-interest
payback schedule? Would the son
have to purchase his father's stock
from his estate and hen make his
yearly payments back to the estate
for distribution to all siblings? How
would such an arrangement affect
the father and son's other partners
in each business -- could it simply be
business as usual with the son now
owning his father's stock in each of
the newspapers?
1 Answer from Attorneys
Re: buy-sell agreement
That is certainly a deal that can be briokered and an agreement that may be drafted. Howevr, whether or not it can take the form described depends on what agreements presently exist between the shareholders. Most corporations have shareholder control agreements or operating agreements in place which control how the business interests may be alienated and whether they must first be offerred to the corporation or the existing shareholders. That muust certainly be examined before any contracts are drafted.
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