Merger and Acquisition: Careful Scrutiny of Legal Documents Helps Structure a Winning Plan for Merger and Acquisition

A corporation decided to sell one of its failing, subsidiary companies to one of GHB's clients. The corporation transferred the subsidiary to the client in exchange for the client agreeing to surrender stock options of the parent. If GHB's client was able to make the Company profitable and sell it, then our client would receive 75% of the proceeds, and the corporation would earn 25%. However, we noticed that the contract was silent about merger. If our client merged this Company, the former "parent" corporation would receive zero. GHB brought this loophole to the client's attention and suggested the client make the corporation a settlement offer. The client followed GHB's advice and settled for one hundred thousand dollars. Shortly thereafter, the client sold the Company for several million. GHB's careful scrutiny of the documents, and our understanding of its terms, helped our client structure a sale that netted them an additional $1 million.