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Welcome
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Initial Consultation
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Engagement Letter
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Buyout Completed

Negotiating a buyout is complicated.
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At The Law Office of Chad D. Cummings, our firm's principal offers a compelling combination of legal and accounting expertise, and we are ready to help you navigate the complex process of negotiating a buyout from your venture.

A buyout, also referred to as a sevarance agreement, buyback, or forced redemption, is the legal and financial process by which a founder, executive, or key employee of a venture is separated from the company, often accompanied by an exchange of cash or shares in return for certain agreements or promises by the former employee to the company.

Our team, led by a professional who is both a Certified Public Accountant (CPA) and an experienced business attorney admitted to The Florida Bar and the State Bar of Texas, is prepared to handle the intricate financial and legal concerns from preliminary discussions through closing and disbursement.

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Meet Chad

/Licensed Attorney and CPA

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I am an attorney and Certified Public Accountant serving Florida and Texas.

Previously, I served in operations and finance with the world’s largest accounting firm (PricewaterhouseCoopers), airline (American Airlines), and bank (JPMorgan Chase & Co.). I have also created and advised a variety of start-up ventures.

I am a member of The Florida Bar and the State Bar of Texas, and I hold active CPA licensure in both of those jurisdictions.

I also hold undergraduate (B.B.A.) and graduate (M.S.) degrees in accounting and taxation, respectively, from one of the premier universities in Texas. I earned my Juris Doctor (J.D.) and Master of Laws (LL.M.) degrees from Florida law schools. I also hold a variety of other accounting, tax, and finance credentials which I apply in my law practice for the benefit of my clients.

My practice emphasizes, but is not limited to, the law as it intersects businesses and their owners. Clients appreciate the confluence of my business acumen from my career before law, my technical accounting and financial knowledge, and the legal insights and expertise I wield as an attorney. I live and work in Naples, Florida and represent clients throughout the great states of Florida and Texas.

I invite you to read my resume (C.V.) to learn more about my credentials and qualifications. If I can be of assistance, please email me at chad@cummings.law, or click here to set up a free meeting.


Client Testimonials


“I hired Mr. Cummings to litigate for me. I hired a company to perform a job and it became a nightmare. . . . He very quickly acted and got the job done quickly for me. He made it happen in a few weeks and I had been waiting over a year. He looked out of me and what was best for me as his client. To me that is what you want when looking for a lawyer to represent you. I will be referring clients and friends to him.“

Client in Naples, Florida

“The much maligned legal profession got a definite lift when Chad decided to take up law. He brings a sharp mind, commonsense thinking and focus on details that allow any client to breathe a sigh of relief. His response time is fast, accurate and explanations are clear and concise. You won’t be left wondering “what did he say” after a conversation about the legal ramifications and available options. We are excited to share that Chad represents our firm. You will be too.“

Client in Dallas, Texas

“Chad is extremely detailed, very thorough, and professional. Highly recommended and will help you get the results. He was able to get us a very favorable settlement . . . he made a very detailed case which made the difference.“

Client in Naples, Florida

“Chad helped me relocate my small business from Texas to Florida and I could not have asked for a better person to do it than Chad. His service was PERFECTION from start to finish. He is clear and transparent with the fee and always punctual, detailed, and prompt with his answers for any question I had along the way. He is such a trustworthy person. I highly recommend Chad for any business-related case and for future business, I will absolutely come back to him without thinking twice.“

Client in Miami, Florida

“Chad is a kind and caring attorney who works tirelessly to help his clients. He is competent and thorough. He makes sure everything is up to date with current laws and he explains everything in a way so you can understand. I highly recommend him for your legal work.“

Client in Naples, Florida

“Chad advised me on a few business formation issues earlier this year, and I could not be more appreciative of his services. His real world experience in the business world coupled with his grasp of the law make for an invaluable advisor. I highly recommend his services.“

Client in Tampa, Florida




The most common mistake founders and employees make is waiting to hire an attorney to represent their interests until after a deal is on the table, or worse, assuming that the company's attorney is in their corner. (They're not.)

Schedule your initial consultation now.

Schedule Your Free Consultation
Speak directly with our firm's attorney.
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Negotiating a Buyout: An Overview of the Process

1. Schedule your initial, no obligation consultation with our Attorney-CPA to determine if there is a fit and to explore the opportunity.

2. Sign an electronic Letter of Engagement by DocuSign to formalize your legal representation and pay a one percent (1%) non-refundable retainer fee calculated on the anticipated buyout amount. No hourly fees.

3. Following an intensive discussion of your goals and analysis of the situation (including risk identification and countermeasures), our Attorney-CPA begins preparing a term sheet, including a preliminary draft of the separation agreement, stock sale agreement (if applicable), and ancillary instruments based upon the bespoke, tailored nature of the unique transaction.

4. A term sheet is negotiated, and if conversations are fruitful, a separation agreement is negotiated and executed soon after. Skipping the term sheet and proceeding directly to a separation agreement is one of the most common (and costly) mistakes unrepresented principals make.

5. While negotiations are underway, our Attorney-CPA acts as a sword and a shield, ensuring that our clients' interests are fairly represented while pressing for the most favorable settlement possible within the limits of ethics and the law.

This includes a thorough analysis of the target company, including due diligence to ensure that our clients are offered the best possible terms in light of the company's current and future financial position, reputation, and any pending litigation.

This is especially critical in the case of early-stage start-up ventures. Failure to perform due diligence of the target company is another common and often fatal mistake, especially where the principal feels he or she is "on good terms" with the other decision-makers.

6. Our Attorney-CPA will represent you at every stage of the transaction, while you remain in the captain's chair without worrying about runaway hourly fees.

7. At the conclusion of the negotiations, the target company and our client may: (a) agree to settle the matter on amicable terms; (b) re-evaluate the decision to separate; or (c) litigate. Our Attorney-CPA will work closely with you to manage the process and maximize the likelihood of a successful and fair outcome on your terms.

8. If an agreement is reached, receive your funds via wire transfer less our legal fee of three percent (3%) of the final, gross buyout amount (that's a total of four percent (4%) with no hidden legal fees).

 

Our Attorney-CPA will be available throughout the process to represent you in discussions with the company, company's attorney, the company's principals, and other participants. You will be in constant, direct contact (no paralegals or "assistants") with our Attorney-CPA speaking often via phone and email from the initial overtures through the final disbursement. If the buyout doesn't close, pay no additional legal fees beyond the initial one percent (1%), non-refundable retainer.




The company's attorneys represent the company's interests.

Your attorney represents your interests.

Schedule your initial consultation now.

Schedule Your Free Consultation
Speak directly with our firm's attorney.
30 minutes. No obligation.


What's Included in the 4%:


  • ✔️ 30 minute, no obligation phone consultation with Chad D. Cummings, attorney and CPA, to determine if there is mutual fit and interest
  • ✔️ Representation with company, company's attorney, company's principals, and company's agents (e.g., their accountants, banks, and financial advisors)
  • ✔️ Preparation, negotiation, revision, and execution of all legal instruments reasonably necessary to consummate the buyout on your terms
  • ✔️ Communication with Chad throughout the process at reasonable frequency during normal business hours to stay abreast of the status
  • ✔️ Reasonable due diligence relative to the transaction and company size to determine strengths, weaknesses, opportunities, and threats (SWOT) to maximize the likelihood of a successful outcome
  • ✔️ Unlimited revisions to the transactions documents as reasonably necessary to carry out and close the deal
  • ✔️ Representation at final closing
  • ✔️ All documents prepared, reviewed, and filed by a REAL attorney and CPA (not an assistant, paralegal, or broker)

What's Not Included in the 4%:


  • ➖ Litigation: everyone loses in court. Our firm's philosophy is to conduct a fair, "above the belt" negotiation that results in the highest and best possible outcome for our clients short of litigation. However, should litigation become necessary, our Attorney-CPA will discuss next steps
  • ➖ Title services and real estate conveyance: for buyouts requiring the transfer of real property assets, the client and company will need to agree upon and retain the services of a title company and escrow agent. We can offer qualified referrals in this regard.
  • ➖ Tax Consulting: Preparation and filing of tax returns, tax planning, retirement planning, and tax strategy are beyond the scope of our representation. Most of our clients already have their own tax professionals and wealth managers. We can offer referrals to tax advisors and wealth management firms if appropriate.
  • ➖ Bookkeeping, forensic accounting, and "clean-up" work associated with preparing financial statements, back taxes (including sales and payroll), and bank records: our firm's financial analysis is limited to those documents and materials reasonably necessary and salient to the proposed buyout. For cases involving complex or contested financial and accounting records, additional fees may apply.

Why Choose The Law Office of Chad D. Cummings?


  • ✔️ Enjoy peace of mind knowing that your interests are represented and documents are prepared, reviewed, and filed by a licensed attorney and CPA with Fortune 500 experience and a brick-and-mortar office, not by a fly-by-night non-attorney (and possibly illegal) online "service" or "consultant"
  • ✔️ Direct access to a real attorney by email (also available over the phone or face-to-face by appointment) during normal business hours, not an assistant or go-between
  • ✔️ Complimentary, no obligation 30 minute phone consultation available before making any commitments
  • ✔️ Innovative, contingency-fee driven model means no runaway hourly fees
  • ✔️ 100% electronic, online filing, scheduling, and communication (no snail mail) whenever possible
  • ✔️ Electronic signatures by DocuSign when needed
  • ✔️ Digital, flexible payment options (including cryptocurrency)
  • ✔️ Weekly email status updates to provide a "case roadmap" every week from initial overtures through final closing

The correct time to hire an attorney is before the initial offer is on the table.

Don't get anchored to their initial terms.

Schedule your initial consultation now.

Schedule Your Free Consultation
Speak directly with our firm's attorney.
30 minutes. No obligation.


Visual of abstractions negotiations of a business sale

Navigating the Ownership Buyout Process: A Lay of the Land

Navigating a buyout of your ownership interests and management rights in a company is a complex and pivotal undertaking in an entrepreneur's career. As a dual-licensed attorney and CPA, our firm brings unparalleled expertise to guide you through this intricate process with cost-effectiveness and transparency.

A. Understanding Business Valuation for Buyouts

Valuation is a crucial first step in a buyout, setting the stage for effective negotiation and strategic positioning. A common oversight is choosing a valuation for their business without undertaking a thorough analysis using one or more time-tested approaches (e.g., discounted cash flow modeling, market comps, EBITDA forecasting and multiples, geographic analysis, macroeconomic analysis), or worse, anchoring to the first-offer figure presented by the company's attorney or principals.

  • Approaches to Valuation: Our firm's principal will explore various valuation methods, selecting the most suitable approach that accurately reflects the value of your ownership interests, including asset-based, earning value, and market value approaches.
  • Factors Influencing Valuation: We consider multiple factors like industry trends, financial performance, and market position. This comprehensive approach ensures a valuation that goes beyond mere estimations and a "back of the envelope" guess.
  • Sensitivity Analysis: Depending upon the complexity of the business and the proposed buyout, we may leverage sensitivity analyses to explore "what-if" scenarios to provide sure footing during negotiations.

B. Deciding on the Buyout Structure

Choosing the right approach to a buyout is critical, with each method presenting unique implications for both the buyer and the seller. We will closely examine options like all-cash buyouts, vesting schedules, and earn-outs, focusing on their impact on the buyout terms.

  • All-Cash Buyouts: An all-cash offer provides immediate and full payment for your ownership interests. This is often preferred for its simplicity and immediacy, and it mitigates risks like future insolvency of the business.
  • Vesting Schedules: In some buyouts, payment for ownership interests is spread over a period, contingent upon certain conditions or milestones. This can align interests but may involve prolonged engagement with the business.
  • Earn-Outs: Earn-out arrangements tie part of the payment to the future performance of the business. While this can potentially increase the overall return, it also depends on the business’s future success, which carries inherent risks.
  • Time-Value-of-Money Consideration: Any delayed payment plan must account for the time-value-of-money. This economic principle dictates that money available now is worth more than the same amount in the future due to its potential earning capacity.
  • Anticipating Future Appreciation or Depreciation: It's important to consider the potential for the business's value to change over time. Future appreciation can enhance the value of deferred payments, while depreciation poses a risk, especially in dynamic industries.
  • Mitigating Risk of Future Insolvency: In light of the potential for future insolvency, all-cash buyouts might be advisable in many cases. This approach ensures immediate and secure compensation for your business interests, eliminating the risk associated with the company's future financial health.

In each buyout scenario, we will meticulously assess these factors and others, ensuring that the chosen approach aligns with your financial goals and risk tolerance. The importance of a strategic, well-informed decision in this context cannot be overstated, as it significantly influences the financial outcome of your exit from the business.

C. Preparing for the Buyout

Preparation is key to a successful buyout, including the determination of floors and ceilings. A realistic understanding of the process and reasonable expectations are crucial ingredients for a successful discussion.

Meticulous preparation is essential for navigating a buyout effectively, focusing on both financial and legal aspects:

  • Financial Review and Planning: Conduct a comprehensive review of your financial stakes in the business. This includes assessing the value of your ownership interests and understanding any operational and reputational implications of the buyout.
  • Legal Due Diligence: Ensure that all legal aspects related to your ownership, such as shareholder agreements and any existing restrictions or obligations, are clear and up-to-date. This step is crucial to avoid any legal hurdles during the buyout process.
  • Strategic Consultation: Engage in strategic discussions with your legal and financial advisors to outline your goals for the buyout and develop a plan that aligns with these objectives, considering potential future endeavors. Are you planning to jump into your next venture as soon as the ink is dry (or sooner)? Or are you ready to retire? The answers to these questions will radically influence the path to "yes" in the negotiations with the target company.

D. Negotiating Buyout Terms

Negotiation in a buyout scenario is a critical phase where terms are set, not just for the transaction, but for your future relationship with the business:

  • Structuring the Deal: Work with our Attorney-CPA to suggest possible structures for the buyout, choosing from options like all-cash deals, vesting schedules, or earn-outs. Each of these options should be weighed for their impact on your immediate financial situation and future prospects.
  • Addressing Time-Value-of-Money and Future Risks: In negotiations, factor in the time-value-of-money, especially for deferred payment plans. Discuss and plan for scenarios of future appreciation, depreciation of the business, or the risk of insolvency, particularly if considering earn-outs or deferred payments.
  • Finalizing the Agreement: Ensure that the final buyout agreement is comprehensive, covering all aspects of the transaction. This includes your exit from management roles, transition terms, and any post-buyout involvement or restrictions, as well as public relations efforts which may be undertaken by the target company in preparation for or following your transition.

You wouldn't perform brain surgery on yourself.

Why would you try to negotiate a buyout without an attorney?

Schedule your initial consultation now.

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E. Managing the Due Diligence Process

During the due diligence phase, we assist our clients in evaluating, quantifying, and sifting all relevant data to maximize the signal-to-noise ratio and screen out irrelevant, distracting material. The objective of this process is to arrive at fair, meaningful buyout terms and not "pie in the sky" numbers that only serve to frustrate the process. This process ensures transparency and aids our client in assessing the business's value and risks.

Under state law, business owners (whether shareholders in a corporation, partners in a partnership, or members of an LLC) have broad, expansive rights to business records, and there are stiff penalties for companies who fail to comply.

Documentation Typically Requested from the Company:

  • Financial Statements: Profit and loss statements, balance sheets, and cash flow statements from the past three to five years, as well as any pro forma projections of anticipated future performance.
  • Tax Returns: Business tax returns for the last three to five years.
  • Lease Agreements: Copies of any real estate or equipment lease agreements.
  • Contracts and Agreements: Includes client contracts, supplier agreements, and any other legal documents.
  • Organizational Documents: Articles of Incorporation, bylaws, business permits, and licenses.
  • Employee Information: Details of key employees, employment contracts, and organizational structure.
  • Asset Inventory: Detailed list of business assets including equipment, inventory, and intellectual property.
  • Existing Loans and Debts: Information on outstanding loans, debts, and lines of credit.
  • Operational Data: Production processes, supplier lists, and customer base analysis.
  • Compliance and Litigation Records: Documentation of compliance with relevant regulations and laws and information pertaining to any threatened, current, past, or actual litigation against the company or its principals.

ChatGPT and Google cannot provide effective legal advice nor draft bespoke documents.

Only a licensed attorney can do that.

Schedule your initial consultation now.

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Speak directly with our firm's attorney.
30 minutes. No obligation.


F. Legal Instruments and Deal Documents

In the process of negotiating a buyout, bespoke legal instruments and deal documents are crafted to align with the particularized goals, risks, and tolerances of our clients relative to the range of realistic outcomes. These documents are essential to the transaction, and their accuracy and specificity are paramount.

Note: Each transaction is unique, and not every transaction will require the same documents. The following is a comprehensive list of potential deal documents:

  • Letter of Intent (LOI) or Term Sheet: An initial non-binding document outlining the basic terms of the deal.
  • Separation Agreement: The primary legal document that outlines the terms and conditions of the separation.
  • Non-Disclosure Agreement (NDA): Ensures confidentiality throughout the negotiation process.
  • Stock and Options Buyback: Shares, units, options, and warrants must be handled effectively and will be a focal point of the negotiations.
  • Non-Compete Agreements: Must be narrowly tailored and negotiated; effectively prevents a principal or employee from starting or engaging in a similar business for a specified period.
  • Asset Purchase Agreement: Used to convey any assets held in the name of the departing principal to the company, if applicable.
  • Stock (or Unit) Purchase Agreement: Used to transfer shares of stock or units of membership if not addressed in a separate stock/options buyback agreement.
  • Lease Agreements: If the business involves leased property or equipment held in the name of our client, these need to be transferred or renegotiated.
  • Vendor/Supplier Agreements: Documents transferring or establishing agreements with suppliers and vendors if the agreement is held in the name of our client (as opposed to the name of the company).
  • Non-Disparagement Agreements: Ensuring that all parties maintain confidentiality and cordial relations post-closing is usually in everyone's interest.
  • Tax Documents: While our firm does not prepare nor issue 1099s, we can connect clients with competent tax advisors and wealth managers to ensure the tax effects of the transaction are addressed and handled.


Receive a Copy Our Free Ebook: Negotiating, Not Fighting: A Guide to Successful Buyouts

 

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Why Professional Legal and Financial Guidance is Essential

The complexity of a buyout demands expert legal guidance. It cannot be left to chance, ChatGPT, or Google. The "do-it-yourself" approach is best left to weekend projects around the house, not the most significant financial decision of your life.

  1. Legal Expertise: Attorneys provide focused knowledge of business law, ensuring all aspects of the buyout comply with state and federal regulations.
  2. Negotiation Skills: Experienced in negotiations, attorneys can secure better terms and protect your interests in the sale agreement.
  3. Contract Drafting and Review: An attorney ensures all contracts are legally sound, clear, and enforceable, minimizing future disputes.
  4. Risk Mitigation: Lawyers identify and address potential legal risks, protecting you from future liabilities and legal complications.
  5. Due Diligence Oversight: While the company conducts due diligence, your attorney ensures your interests are safeguarded during this process.
  6. Tax Implications: Legal counsel can help identify possible tax implications of the sale, aiming to optimize your financial outcomes.
  7. Confidentiality Management: Attorneys help maintain confidentiality throughout the transaction, protecting sensitive business information.
  8. Dispute Resolution: In case of disputes, having legal representation can expedite resolutions and avoid costly litigation. In effect, hiring an attorney communicates that you are serious and expect a fair outcome.
  9. Customized Solutions: Every buyout is unique, and attorneys provide bespoke solutions tailored to your specific needs and goals.
  10. Peace of Mind: Knowing a professional is managing the legal aspects of the deal allows you to focus on your future plans with confidence.

Why Choose The Law Office of Chad D. Cummings?

  • Gain confidence with effective, experienced legal representation and document preparation, review, and filing handled by an Attorney and CPA with Fortune 500 background, based in a physical office, unlike transient online-only "services" or "consultants"
  • Access a genuine Attorney-CPA directly via email (also available for phone or in-person meetings by appointment) within standard business hours, bypassing intermediaries or assistants
  • Enjoy a complimentary, obligation-free 30-minute telephone consultation before any formal engagement
  • Benefit from a forward-thinking, contingency-based fee structure, avoiding unpredictable hourly charges
  • Embrace a 100% digital approach to filing, scheduling, and communication, sidestepping traditional postal services
  • Utilize DocuSign for efficient and secure electronic signatures as required
  • Flexible digital payment methods available, including the option for cryptocurrency payments and other flexible terms
  • Receive weekly email updates offering a comprehensive roadmap, guiding you from the initial discussions to the final closing


Investing in a competent Attorney-CPA to represent you in the buyout can provide a 10x (or even greater) return.

Don't be "penny wise and pound foolish."

Schedule your initial consultation now.

Schedule Your Free Consultation
Speak directly with our firm's attorney.
30 minutes. No obligation.