Two Owners Disagreed Over a Business Buyout. How a Wisconsin Firm Broke the Deadlock
A story about valuation, governing agreements, and the negotiated terms that allowed the owners to separate.
The questionHow do business owners settle on a buyout price when they can't agree?
Illustrative example
MADISON, Wis. — The co-owners of a Madison craft brewery have agreed to a $780,000 buyout, ending a year-long deadlock over what one partner's half was worth.
Their operating agreement allowed a buyout but left the valuation method unclear. Offers from each side were more than $500,000 apart.
With the owners unable to agree, the brewery had frozen hiring and expansion plans.
Elsworne Law proposed a joint independent appraisal under the agreement's dispute clause, then negotiated payment terms around the appraiser's range.
The departing owner received $780,000, paid partly at closing and partly over three years, with a security interest in the brewery's equipment.
Part of the price is paid over time and depends on the brewery's performance.
A clear valuation method in an owners' agreement can prevent deadlocks like this one.
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