buy sell agreement in Ch 11
Posted: Wed Feb 13, 2013 1:40 pm
Closely held Corporation considers Ch 11 because of falling profits.. Partner holding half of the shares dies. There is a buyout provision in the event of death. It doesn't mention bankruptcy. Active partner is refusing to pay any part of the buyout and claims that it is a contract which can be terminated in the Ch 11. I have researched and see that a buy sell agreement is mentioned among the lists of executory contracts which can be terminated. After check of the cases, it looks like that refers to a contract to buy back employee stock. I realize that if the Estate sues the corporation before BK, that would be a judgment which would be discharged. The question is, can the Buy Back Agreement caused by death be a rejected contract?
Margaret Norman, Attny
111 N. Sepulveda Blvd. #355
Manhattan Beach, Ca. 90266
310-376-7873
Fax 310-798-0846
Closely held Corporation considers Ch 11 because of falling profits.. Partner holding half of the shares dies. There is a buyout provision in the event of death. It doesn’t mention bankruptcy. Active partner is refusing to pay any part of the buyout and claims that it is a contract which can be terminated in the Ch 11. I have researched and see that a buy sell agreement is mentioned among the lists of executory contracts which can be terminated. After check of the cases, it looks like that refers to a contract to buy back employee stock. I realize that if the Estate sues the corporation before BK, that would be a judgment which would be discharged. The question is, can the Buy Back Agreement caused by death be a rejected contract? Margaret Norman, Attny111 N. Sepulveda Blvd. #355Manhattan Beach, Ca. 90266310-376-7873Fax 310-798-0846
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