Shareholder Representative Services – The Smart Way to Exit

Most sales of privately-held companies require someone to serve as the representative of the shareholders following closing. Nobody wants to do it, but someone reluctantly agrees in order to get the deal closed. Being the shareholder representative is a chore. It involves communicating with institutional and employee shareholders, reconciling escrow accounts, investigating claims and navigating litigation, and accounting for expense, claim and interest allocations. These are all distractions that expose the individual serving as the representative to legal and financial risk and detract from what should be the best use of their time – identifying the next deal and managing the rest of their portfolio. Additionally, when disputes do arise, ensuring an optimal outcome for the selling shareholders requires specialized expertise. For all these reasons, several institutional investors approached us to set up SRS. We make the burden and exposure go away while ensuring maximum and timely return of sale proceeds to shareholders.

Why SRS?
The SRS Solution

 

As one of the nation’s leading business law firms, Gunderson Dettmer sees a lot of M&A deals. It’s not unusual to run into situations where stockholders aren’t enthusiastic about taking on the job of shareholder rep. SRS provides an attractive solution by allowing the shareholders to eliminate the burden of being the representative with the comfort that the post-closing process will be professionally and independently managed.

  
Ilan LovinskyPartner
Gunderson Dettmer
Stough Villeneuve Franklin & Hachigian, LLP