Share Purchase Agreement Shareholder Loan

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Compensation is more accurate. It only makes an appeal against the purchaser available to the assignee if and to the extent that the judicial administrator is effectively asserting rights against the assignee. If compensation is guaranteed and written to meet the needs of sellers and buyers, for example. B in terms of caps and deadlines, compensation is generally a good solution to the previous question. It is often used in practice. The practice of AMs has essentially found two options, the seller before the claims according to the s. 135 ss. 1 No. 2 InsO. One option is to sell the shareholder loan, but to include clauses in the sale agreement dealing with the potential claims of the judicial administrator. The other option is not to sell the loan, but to provide an economically equivalent solution. A pre-payment right assumes that, when an existing shareholder wishes to sell its shares, all shares must first be offered pro-rata to existing shareholders, allowing existing shareholders to retain their percentage in the company before being sold to an external third party. It also protects existing shareholders from unpleasant new shareholders.

However, if existing shareholders cannot afford to buy the shares, the shares can continue to be sold to the third party and existing shareholders may end up with a new co-owner. One of the flaws of the pre-emption right is that it can lead to long delays in the sale of shares. Since the buyer inherits a business, buying shares generally carries a much greater risk than buying assets. This justifies the inclusion of necessary safeguards to protect the buyer. From time to time, a buyer objects to compensation because he bears the risk of paying twice for the same credit: first when the purchase price of the loan is paid, and then after a possible challenge if the compensation is claimed. The seller`s argument that this will only happen if the target company becomes insolvent within the rather short period of one year after the closure and when the business is under the exclusive control of the buyer is sometimes thwarted. Some buyers are concerned that insolvency is triggered by risks that the seller has already incurred in the past and which are only to come after closing and without sufficient coverage by the seller`s guarantees. Once the shares of the target transaction are transferred, the property is transferred to the buyer. It is likely that the buyer would likely appoint new directors, accountants, etc. The buyer may also want to remove the current officers.

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