Buy-Sell Agreements: Ticking Time Bombs or Reasonable Resolutions?

BY KIM NILSEN

by Z. Christopher Mercer, ASA, CFA
Peabody Publishing LP, 2007, 324 pp.

Predicting the future is practically impossible. For businesses, that uncertainty makes planning crucial. Z. Christopher Mercer offers a granular look at one method of applying present tense solutions to future decisions and transitions. Mercer examines the world of buy-sell agreements, which establish a mechanism for the purchase of equity interests following the death of one of the owners of an entity or some other major or adverse change in a business environment.

Mercer writes from the perspective of a businessman and business appraiser. He is the founder and CEO of Mercer Capital, a business valuation and investment banking firm based in Memphis, Tenn.

He advises readers not to expect a how-to guide to drafting buy-sell agreements. But readers will find plenty of detail on the finer points of the appropriate use of valuation expertise when weighing such agreements from both business and valuation perspectives.

The book’s intended audience includes CPAs, attorneys, business owners, CFOs, fiduciaries of business owners, insurance professionals and corporate directors.

Mercer rounds out the book with a chapter showcasing war stories and potential pitfalls. He also shares his firm’s checklist for a forward-looking buy-sell audit.

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