Akerman Litigation Practice Group Partner Mike Hess and Associate Bryce Pilawski contributed an article to Texas Lawyer, “Buy-Sell Provisions in Business Partner Disputes,” examining how buy-sell provisions help address disputes between business partners and reduce the risk of costly litigation.
In the article, Mike and Bryce explain how these provisions operate in the context of “business divorces,” where breakdowns between co-owners can lead to disputes over control, assets, and fiduciary duties. They explain that buy-sell provisions create a structured mechanism allowing one partner to initiate a process requiring the other to either buy or sell its interest at a defined valuation, helping streamline separations and narrow contested issues.
Drawing on Texas case law, Mike and Bryce explain that courts routinely enforce buy-sell provisions as a matter of contract, reinforcing their role in promoting accountability between parties. They also outline practical considerations for drafting and invoking these provisions, including valuation structure, notice requirements, and timing of elections.
Mike and Bryce conclude that, when properly structured, buy-sell provisions can reduce litigation costs and provide a more efficient path to resolving partner disputes.