Pub. 5 2015 Issue 1

10 AUTOMOBILE DEALER NEWS ILLINOIS www.illinoisdealers.com H owever, often, parties aspiring to put together a buy-sell eagerly engage in discussions, and reach preliminary understanding of some of the material terms, before they have engaged their lawyers to advise them and prepare required contracts, memorializing the parties’ intentions. In this early stage, negotiations might impact material terms of the deal and the parties’ rights. If the parties do not involve counsel until the point when binding agreements are drawn up, they should be wary of potential problems they may create for themselves, and at a minimum, be mindful of a few points during this initial phase. First, discussions should be documented. Prospective parties to a transaction commonly get together, in-person or over the telephone, to talk about their desired deal, which might include price terms and other aspects of the proposed deal. It is prudent to take thorough, contemporaneous notes of these conversations. These notes should include the dates of the conversations, who participated, and as much detail as possible and be placed in a separate file that can be easily accessed. Be organized. This may be helpful should the need arise down the road for clarification or in the event of a disagreement. Second, the importance of collecting necessary information and documents cannot be overstated. This might include lists of inventories, customer records, existing environmental reports, appraisals, list of any pending litigation and the like. A seller should compile all of this information in the early stages, ideally before any negotiations occur. Relegating this important aspect There are numerous considerations for a proposed seller and prospective buyer to think about before entering into a buy-sell transaction. Most would agree the time for bringing in competent automotive counsel, an accountant, and any necessary advisors is at the very beginning because there are legal, tax and planning considerations that go into structuring the transaction in order to protect the parties’ interests. DealershipBuy-Sell Negotiations – Key Considerations BY JULIE CARDOSI , LAW OFFICE OF JULIE A. CARDOSI, P.C COUNSELOR’S CORNER