Tony assisted in the sale of shares by a technology start-up to an ASX listed purchaser. There were two groups of shareholders, majority shareholders who would continue to work in the business and minority investor shareholders.
The sale price included earn out components to vest over a number of years. The two groups had differing risk profiles in regard to vendor warranties, indemnification and limitation of liability having regard to their level of involvement with and knowledge of the business and the portion of the sale price they were to receive.
In order to balance these interests, a different vendor warranty and limitation of liability regime was devised as between majority and minority shareholders. This allowed the sale to proceed, and all shareholders understood their potential liability for a warranty claim and were satisfied with this mechanism
The sale was negotiated, documented and completed in less than three weeks, involving weekend and after hours work and the total legal costs for the sellers were lower than the estimate.