• Overview
• Commercial Leases
• Are all Debtors the same?
• Tech Industry Business Purchase
• Restaurant purchase and Retail Shop Lease
• Shareholder Agreements and Share Sale Agreements
Overview
Business is an endless series of good and bad problems. Clients come to us because working with good people makes business much better. Like travel, the right company improves the good times and makes the hard times manageable.
You are looking for allies to smooth out welcome or unwelcome challenges in your business. There’s some uncertainty and you’d like to get it under control.
You probably heard about us through a word-of-mouth referral or maybe even a Google search. We’re looking forward to working with you. Reach out to start working with us now.
Commercial Leases
Jaqueline: called us to ask for help with a new commercial lease for her accounting firm. They’ve been around for many years and they’ve been on a month to month lease for much of that time. The new building owners decided that they wanted a lease.
We reviewed the draft lease they provided and drew her attention to the main items which often cause friction between landlords and tenants like outgoings, options, bank guarantees, consent to signage, maintenance costs, indemnities, landlord works and redecoration.
Because we regularly prepare and review leases we were able to give Jaqueline some reasonable recommendations to reduce her exposure. Being reasonable, the changes were accepted by the landlord without much fuss.
Are all Debtors the same?
After talking to hundreds of debtors we’ve slowly come to realise that although their stories are sometimes a bit different, they all rhyme. A critical theme is that they do have money in their lives but they don’t want to spend it on the debt they owe.
- Broken promises – All debtors start with a promise to pay soon. Something came up and it’s a bad time for them. Everything will be ok again very soon. They don’t pay. They stop answering the telephone and only respond to emails sometimes. They are having a tough time. They are hard to contact. The next time they “thought they had made that payment”. Then they start asking if they can make a payment plan. They make a part-payment then they stop paying.
- Choosing not to pay – They put their head in the sand. It’s always the same. Whether it’s a car payment, rent, an invoice, a telephone bill or a loan. They try to delay making the payment. We tell our clients: “The debtor is paying other people, they are just choosing NOT to pay you”.
- Problems – Debtors all have financial problems they didn’t expect. They all have family troubles of one kind or another. There is usually a health or relationship issue as well. Everyone else just manages those things as part of life and pays their bills as they fall due.
- All the same – Debtors don’t realise their creditors have heard all of these excuses before. They don’t realise that they all sound the same. Debtors are surprised when the letter of demand arrives from a lawyer because they meant to pay that money. They are shocked when a caveat or a mortgage goes over their property.
- Credit problems – They are worried about the impact of a court judgment on their credit position. They worry that their lender will withdraw the loan(s). They are furious to learn how much interest is owing and how much the debt has increased to cover the legal fees to chase it.
- Expensive delay – They threaten, bluster and eventually they pay thousands more than they could have at the start. Problems don’t age well and neither do debts. Pay early and get it done. Reach out to start working with us now.
Tech Industry Business Purchase
Stephanie: is considering buying a business for $500,000.00 in the tech industry. The business is a combination of software and hardware. It’s a “turnkey” operation and apparently has strong profit margins. Stephanie wants to make sure that the risk / reward makes sense to her. She’s concerned about recent staff turnover and wants to make sure she’s buying real value.
Clearman Lawyers has drafted special conditions to the contract to make sure she can make good due diligence enquiries. She wants her accountant to go through the numbers carefully to make sure it’s a sustainable business. Stephanie also wants to have a good sense of how robust the client list is before she commits. That way she’ll know exactly what she’s buying and will be able to make sure that she gets exactly what she’s paying for.
Negotiations so far include a vendor funding arrangement and that the contract will be subject to the numbers stacking up. We’re looking forward to assisting her with the purchase. Reach out to start working with us now.
Restaurant purchase and Retail Shop Lease
Dennis: contacted us because he was buying a popular restaurant business. He called on the Monday and he and the seller wanted to finalise the deal by the end of the week. They were both surprised to learn that because it was a retail shop lease the landlord required a seven-day cooling off period once all the retail shop lease documents had been exchanged. Once Dennis understood the legal time frames he reset his timetable.
The seller’s solicitor prepared the contract for the business sale and we prepared buyer special conditions to make sure that all licences, signage, equipment leases, business names, telephone numbers and approvals etc would be provided and acceptable at settlement.
We carefully reviewed the draft lease and car park licence with Dennis and made the changes he wanted. We then helped Dennis to provide the landlord’s solicitor with the retail shop lease disclosure documents.
We helped him liaise with his banker to make sure funds were in the right place at the right time and settlement took place about two weeks after Dennis first spoke with us. He was excited to get to work and pleased with the outcome. Reach out to start working with us now.
Shareholder Agreements and Share Sale Agreements
Sometimes we need to move past old situations to be able to move to the next level.
Jacinta: asked for help to prepare a share sale agreement to buy out a minor shareholder to the business. That took some time and negotiation to accomplish because there were some disagreements about the restraint of trade conditions and access to important documents. Once that deal was locked in, she asked us to prepare a Shareholder Agreement to bring in a great business partner to run the other half of the business.
The two business partners had worked together before and found it easy to agree to the provisions about dividends, management of the company and valuation if a share buyback was ever necessary.
They also found it easy to agree about confidentiality, no compete clauses, payment negotiations and a process to change directors to work together effectively. Reach out to start working with us now.
Disclaimer
This page is not intended to provide legal advice and does not create a client-lawyer relationship. This post is provided for general information purposes and should not be relied upon as a substitute for legal advice. If you need help with legal advice for your particular situation, please contact our office (details below or on ‘Contact’ page) and we’ll be happy to assist you.