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Archive for October 16th, 2007

Extortion at Closing

Tuesday, October 16th, 2007

At 2PM on Friday we told the two key managers (General Manager and VP of Sales) that we would be closing the sale of the business to a large regional pest control company in exactly one week.  The managers, understanding how important they were to the health of the company, soon realized that they possessed a tremendous amount of leverage.  Within 48 hours, they informed us that they would walk out the door unless we provided them a legal document promising a combined total of $500,000 at the closing table. At the start of the process, we knew that this could become a problem.  Because we didn’t have enough time to plan appropriately, we were very careful to make sure that the definitive purchase agreement signed by both buyer and seller clearly stated: (more…)

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