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M&A Nuggets: Do You Have A “Wilson”?

In the 2000 movie Cast Away, the character portrayed by Tom Hanks, stranded on a deserted island, created a personalized friend, “Wilson”, from a Wilson volleyball. That friend helped the character survive and escape from the island. In a merger, the seller may need one or more of these friends to assist it through the merger process. One of the difficult but important decisions a seller must make up front is who at the company to confide in regarding the merger talks. The due diligence process can strain the seller’s resources. During the Covid-19 pandemic, the due diligence process can take longer and be even more cumbersome. Sellers often cannot tackle the enormous job of due diligence on their own. There may be one or more key employees the seller needs in this process. Care must be taken, because the persons chosen to assist must be trusted to not leak news of the merger talks. If those key employees exist, they can be a huge asset in the merger process. As an incentive, these key employees will often be offered an incentive bonus to be paid upon successful completion of the merger. The lesson here is that a seller should think hard about whether it needs a Wilson, and if it does, whether it has the key employee(s) to help it keep the volleys going while seller and buyer negotiate.

If you have any questions about this or any other M&A issue,
please contact Glenn Solomon at gsolomon@offitkurman.com or 443-738-1522.

ABOUT GLENN D. SOLOMON

gsolomon@offitkurman.com | 443-738-1522

Glenn D. Solomon is a principal at Offit Kurman and has provided counsel to businesses and business owners for more than twenty-five years. He has extensive experience in the purchase and sale of businesses, structuring ownership agreements, and advising companies in financial distress.

ABOUT OFFIT KURMAN

Offit Kurman is one of the fastest-growing full-service law firms in the United States. With 14 offices in seven states, and the District of Columbia, and growing by 50% in two years through expansions in New York City and Charlotte, North Carolina, Offit Kurman is well-positioned to meet the legal needs of dynamic businesses and the individuals who own and operate them. For over 30 years, we’ve represented privately held companies and families of wealth throughout their business life cycles.

Whatever and wherever your industry, Offit Kurman is the better way to protect your business, preserve your family’s wealth, and resolve your most challenging legal conflicts. At Offit Kurman, we distinguish ourselves by the quality and breadth of our legal services—as well as our unique operational structure, which encourages a culture of collaboration and entrepreneurialism. The same approach that makes our firm attractive to legal practitioners also gives clients access to experienced counsel in every area of the law.

Find out why Offit Kurman is The Better Way to protect your business, your assets and your family by connecting via our Blog, Facebook, Twitter, Instagram, YouTube, and LinkedIn pages. You can also sign up to receive LawMatters, Offit Kurman’s monthly newsletter covering a diverse selection of legal and corporate thought leadership content.

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Author: Glenn Solomon Esq.
Articles have been Reprinted with permission from the charlotte observer and Mike Hunter.

* These articles and related content on this website are provided without warranty of any kind and in no way constitute or provide legal advice. You are advised to contact an attorney specializing in Association Management for legal advice related to your specific issue and community. Some articles are provided by thrid parties and online services. Display of these articles does in no way endorse the products or services of Community Association Management by the author(s).