Broker Check

Episode 13: Is Your Buy/Sell Agreement Any Good?

In this episode of the Family Business Show, host Michael Palumbos is joined by Paul Hood and Don Parkhill to delve into the intricacies of buy-sell agreements. The episode begins with Michael introducing the topic and his guests, highlighting their expertise in the field.

Paul Hood shares his journey from being a tax lawyer to a consultant, speaker, and author, particularly focusing on his personal connection to buy-sell agreements due to a family experience. He emphasizes the importance of these agreements in business, comparing them to a business's last will and testament.

Don Parkhill recounts his transition from law to financial consulting, emphasizing his passion for helping family-owned businesses. He discusses the significance of understanding and properly structuring buy-sell agreements to ensure fairness and avoid future disputes.

The conversation then shifts to the common pitfalls and overlooked details in buy-sell agreements. Topics such as valuation methods, insurance considerations, and handling situations like divorce or competition from a departing partner are discussed. The experts stress the necessity of fairness, thorough planning, and the involvement of experienced professionals in drafting these agreements.

Throughout the episode, the importance of conducting a "fire drill" is highlighted, where business owners are encouraged to review their buy-sell agreements by simulating potential triggering events to understand the agreement's practical implications fully.

In conclusion, the episode underscores the critical role of buy-sell agreements in the stability and continuity of family businesses. It serves as a call to action for business owners to scrutinize their current agreements and seek professional advice to ensure their businesses are well-protected for the future.

Watch the entire episode!

Episode 13 Transcript


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Michael Palumbos: Welcome everybody to the family business show. My name is Michael Columbus. I'll be your host today from family wealth from legacy and sunny Rochester, New York. Okay, three days a week, sunny three days a year. Sunny



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Michael Palumbos: Today I'm really excited to be joined by Paul hood and Don Park Hill and I



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Michael Palumbos: Just appreciate the two of you coming on. It was nice. We did a we got together for a pre show kind of get together, you know, what are we going to talk about man.



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Michael Palumbos: You guys are so incredibly intelligent about this world of, buy. Sell agreements, I can't wait.



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Michael Palumbos: To share with people and help them figure out is, is your buy, sell agreement any good. So what I'd like to do is just take a second and have each of you introduce yourselves. Tell us about your journey, a bit and and how you got here and



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Michael Palumbos: You know, I guess that share with people how they you know how you can be reached in the future if they like what they're hearing today. So Paul, why don't you kick us off.



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Leonard Hood: All right, I am a recovering tax lawyer.



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Leonard Hood: I practiced tax and primarily a state planning for high net worth individuals for about 20 years



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Leonard Hood: Until a little event called hurricane.



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Leonard Hood: Katrina happened and I was down in Louisiana at the time and the economy basically disappeared. I mean, it was gone.



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Leonard Hood: So I moved and moved to Napa, California.



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Leonard Hood: But I did not want to be a lawyer there because I didn't want to sit for their bar. So I just started consulting and speaking and writing and now I've written I'm working on my eighth book right now.



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Leonard Hood: And I primarily do speaking writing and consulting. I mean, that's really my life today and it's a it's a great life.



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Leonard Hood: But



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Leonard Hood: I guess the experience of all the years I mean over 30 years now of high end estate planning.



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Leonard Hood: It really, it's, it's made a difference for me because of the experience that I have



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Leonard Hood: Buy, sell agreements are very personal to me because my family got the short end of the stick on a typical book value, buy. Sell agreement.



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Michael Palumbos: I'm going to ask you to pause on that one, because that's



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Leonard Hood: Okay.



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Michael Palumbos: I want to, I want to jump right into when we get started.



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Michael Palumbos: And you're being very modest I've read some of your books. Matter of fact, one of your co authors and I had



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Michael Palumbos: A conversation. We're going to bring you back end with Emily to talk about some blended family estate planning issues someday somewhere down the road here and



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Michael Palumbos: Paul speaks an awful lot for leinberger information services, which is, you know, industry, why, when it comes to a state planning and tax just one of the top notch organization so appreciate you. Your humbleness, but me, oh my, you are up there in the the levels of



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Michael Palumbos: Professionals and experts in our arena. So thank you for joining us. Paul



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Leonard Hood: You too kind. But thank you



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Michael Palumbos: Don Park Hill and I go back many years.



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Michael Palumbos: And St. Paul and I, but you know, it's just fun to get to bring a friend on and talk about things that we love to talk about so done. You know, take a, take a minute and introduce yourself.



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Don Parkhill: Thank you Mike. It's a real honor and a pleasure to be here with you and Paul appreciate you putting this together and asking me to participate.



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Don Parkhill: So like Paul. I'm a recovering attorney and



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Don Parkhill: after law school. I went to work for Price Waterhouse, back then it was part of the big eight and from there I went to work for a law firm in Columbus and



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Don Parkhill: I just loved her clients. They all came in the back door, their jeans and flannel shirts and they were the salt of the earth. And they were just very, very successful and it was all because of their hard work.



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Don Parkhill: And so I really appreciate what they had done. My father was an entrepreneur, of sorts. So I just really enjoy working with the small business owner, the family owned business.



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Don Parkhill: And from there, the journey was didn't want to continue to practice law and



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Don Parkhill: started my own financial firm bought a couple businesses and from there the journeys been



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Don Parkhill: John warnings PR purposeful planning Institute collaboration and custom wealth advisors and legacy group out of Boston. So it's been a long and very journey, but it's really opened my eyes.



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Don Parkhill: To the planning that's available for folks out there. And as Paul mentioned, you know, the 3035 years plus doing this.



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Don Parkhill: We really bring a lot to the table because we've just seen so much good and sometimes not so good. So, but it's great to help these folks out, it just love it. Awesome.



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Michael Palumbos: Thank you both for being here. So Paul, you started jumping in to this story and I can't wait for you to share this because this is



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Michael Palumbos: Whenever it comes from a personal nature. It's always stronger and I you know I know that because of working with my father. That's the thing that really blended me or you know magnetically attracted me to working with family businesses.



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Michael Palumbos: So tell us about the story of your family in the buy, sell agreement.



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Leonard Hood: Well, I will tell you that I love to pull for the underdog and family businesses, even though you've got some in the Fortune 100



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Leonard Hood: family businesses are underdogs, there are lots of laws that are stilted against family businesses. When I was a young child, my grandfather was forced out of a company that he had co founded



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Leonard Hood: At the same time, my uncle was fired from that company and my grandfather that triggered the buy, sell agreement in the Articles of Incorporation



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Leonard Hood: And it was for book value. This was a business that had been going on for 44 years at the time. So there's a lot of goodwill that didn't count and



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Leonard Hood: But you know how karma is a. In the end, the son of my grandfather's partner who for who basically was behind, forcing him out.



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Leonard Hood: Of ran the company after that into the ground. So we were the only family that made any money or came away with any money because that business went into chapter seven, unfortunately.



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Leonard Hood: It was sad. It was sad for me to watch that. But we all knew what was going to happen.



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Leonard Hood: And it just breaks your heart, but



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Leonard Hood: Buy, sell agreements are very important documents, I look at them as, as you know, some people call them the business prenup but I don't think that's accurate.



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Leonard Hood: I think that a buy, sell agreement is more like a businesses will last will and testament, because there's gonna be some event that triggers that buy, sell agreement and if you have, if you don't have one, then you're, you're basically the business equivalent of dying intestate



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Michael Palumbos: Right and



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Leonard Hood: We all know the problems that brain. And yeah, my, my next book is on, buy. Sell agreements for the layman, it's actually at the publisher right now.



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Leonard Hood: Being developmentally edited.



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Leonard Hood: Which is an interesting



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Leonard Hood: Process, but now it's so I always had a little chip on my shoulder. When I worked on a buy, sell agreement, because all of the parade of horribles that could go wrong stayed at the Forum my mind and I just was



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Leonard Hood: bound and determined to not let that happen to anybody on my watch.



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Michael Palumbos: Right. I love that you know it's it's funny that you say that because I'm working with a family right now that you know one of the family members was



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Michael Palumbos: Asked to leave and rightfully asked to leave it was nothing wrong with that piece of it you know it was you know if you don't play nice in the sandbox. That makes sense.



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Michael Palumbos: That the hard part though is that there was a difference whether that person was fired or they left you know they were the ones that left the buy, sell agreement treated it differently.



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Michael Palumbos: But it's still all came back to like you were talking about book value.



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Michael Palumbos: And so, you know, they've got one company that it's an asset heavy company. So it's depreciated like there's no tomorrow, but it's worth



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Michael Palumbos: You know, fair market value is so different than what the book value is. I just feel



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Michael Palumbos: Really bad because you know that he's not being treated fairly, the family's feeling like you know in their heads because of the attorneys that you're dealing with saying



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Michael Palumbos: We're going above and beyond to treat you fairly because we're giving you the, you know, as if you know we fired you numbers, not the numbers, you know, as if you left and you're the one that said you wanted to leave.



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Michael Palumbos: And at the end of the day, I'm with you. I don't think book value is a fair, you know number to be working with



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Michael Palumbos: Don when you were when when we talked before you had an example, you know, have a family talk about that for just a second. Again, this all sets the stage for why these things are so important.



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Don Parkhill: And we're talking about



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Don Parkhill: fundamental fairness and you show up to work every day with these folks and whether it's a prenup or last will and testament. I love that Paul someday, it's going to be, it's going to come to fruition. And so it's important that everybody be treated fairly open communication, etc.



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Don Parkhill: And so this group of individuals put together a buy, sell agreement they had the attorney come in and he talked with them and



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Don Parkhill: It was over several meetings and they said, well, this is the way we're going. And one of the younger partners went in and said to the senior. I don't think this is fair.



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Don Parkhill: Burger said, Okay, we'll take that into account and they came back. Simple. This is the agreement. He says, you know, I don't think this is fair.



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Don Parkhill: And they said, well, this is, this is what we voted on this is the way it's going to play out. He said, Okay, fine.



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Don Parkhill: So few weeks later, the younger partner came in and said, here's my letter of resignation.



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Don Parkhill: Lisa, will you can't retire. And he said, yeah, I think agreement says the first one out gets this price. I like the price. I'd rather you pay me than I pay you. So I'm leaving.



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Don Parkhill: And he did, he left. He was out for three years, Korean, the non compete and we're back in business and competed against a very successful and it was just a matter of fairness.



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Michael Palumbos: Right, it's, you know, a lot of times, one of the things that we talked about. I think both of you do exactly the same thing is let's take a look at that agreement and let's look at how it's gonna you know pan out when these things happen, right.



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Michael Palumbos: Right.



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Don Parkhill: Then you know



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Don Parkhill: In the Paul's point about the last will and testament, you know, we're used to the diagram to show people. Well, this happens, it goes to this trust. If this happens, it's divided, whatever.



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Don Parkhill: And most people like that because it's simple. It's on one page.



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Don Parkhill: Very seldom do I see anybody do that with a buy, sell agreement so that they understand exactly where it goes, how much they're going to get if this happens. If X happens if why happens



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Don Parkhill: So the simpler. We can make these things because it's interesting how our clients are so successful.



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Don Parkhill: And so few of them I they don't want to do this. That's why they hire us right and



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Don Parkhill: So forth. They don't want to get down in the weeds. They want the simplification. And so it's important that they understand and have folks that can put it on one piece of paper and say, here you go. And they say, that's not really what we talked about



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Don Parkhill: You know the devils in the details. Right.



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Leonard Hood: Oh you bad I tell people all the time before I even read your buy, sell agreement, I say, Do yourself a favor and conduct a fire drill, make believe that a triggering event you pick it occurs. Now read your agreement and trace it all the way through to the end.



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Leonard Hood: And people say, my gracious a procedurally just doesn't even make sense.



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Leonard Hood: You know, I love, I mean a classic example is when they need the appraisal done in 30 days.



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Leonard Hood: I mean no business appraisal. I mean, I've commissioned hundreds of business appraisals in my career.



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Leonard Hood: The fastest I've ever seen one done was probably 5060 days, and that was rushing it right you know



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Don Parkhill: So you're. Have you ever had a client, be able to get the appraiser all the information in 30 days. Well,



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Leonard Hood: And and no no



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Leonard Hood: That's right.



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Leonard Hood: Are not not all the material information. They like to hold out things. So you really sort of have to play.



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Leonard Hood: sleuth and bird dog with your client and make them turn over the material information to the appraiser because otherwise the appraisal won't be worth anything because it'll omit material information.



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Michael Palumbos: Agreed. So you said worth. I'm going to take from that word, and we're going to roll this into one of the things that we talked about was, you know, why using valuation formulas



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Michael Palumbos: Is a fool's errand. And you know, when we were when we talked before we talked about book value and how that doesn't



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Michael Palumbos: Always that's not really fair for many, many times when you're going through these things. But, you know, so oftentimes, you'll see a formula is written into the into the buy, sell agreement. Let's talk about that. What's the, what are your issues with having a formula and the buy, sell agreement.



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Leonard Hood: Well, for starters, when I was a young lawyer. I thought that I could draft a good formula for a buy, sell agreement, one that was in susceptible of manipulation.



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Leonard Hood: And I learned pretty early on that you couldn't do that every formula can be manipulated and people when they when the, when the ops goes in the ditch.



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Leonard Hood: People take people take their sides and they're going to do whatever is best for their side.



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Leonard Hood: And that's why I mean Don's point about fundamental fairness and by I spent as much time protecting the minority owners.



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Leonard Hood: As I did protecting the majority owners who often were my clients because I used to tell them, if this thing is not fair.



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Leonard Hood: Then you're going to have a problem and it's going to cost you. If you may win, but it's going to cost you a lot of money. It's going to cost you a lot of stress heartache aggravation.



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Leonard Hood: All on unpaid time when you're also still trying to run your business. So it's a fundamental fairness is is at the core of a buy, sell agreement.



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Don Parkhill: And to that point about protecting the minority interest and so forth. You know, one of the things I often see is that the



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Don Parkhill: Two partners will say, or three, or whatever, you know, we get along famously if you you know if there's some discrepancies in there document.



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Don Parkhill: It's not an issue. It's just, it's not an issue because we'll get this resolved, we just get along and I say, okay, that's fine with the pulse point pick something that you think could blow up.



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Don Parkhill: But what if one of them gets taken out by the truck, you're no longer dealing with him, you're dealing with his attorney.



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Don Parkhill: And the attorney position is to take care of the family. And they say, Well Michael would have wanted it this way. Well, we don't know that because Michaels not here. My job is to follow the document. Well, that's not what we intended



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Don Parkhill: Sorry. Right. And so you know it's it's one thing for everybody to have fundamental fairness and get along well they're all here. But when one of them isn't that's an entirely different situation because now we're not dealing with the same players.



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Leonard Hood: That's why it's so critical when everybody is still in agreement.



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Don Parkhill: And still on.



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Leonard Hood: And speaking terms to hash out. That's why I developed that one page because you mentioned one page and simplicity. Well, I'm a slave to simplicity



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Leonard Hood: When I was the trustee of a very large trust and I used to hire. I don't know 50 to 70 lawyers, a year to manage



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Leonard Hood: The because it was a trust full of various business interests and yea real estate and, I mean, you name it.



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Leonard Hood: And I used to say, if you can't say it on a page, you don't understand it well enough to talk to me about it.



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Leonard Hood: And that that buy, sell agreement with the with the two axes, one being the triggering events, the possible triggering events, the other axis is the response to that triggering event. And I used to give that to clients and let them check



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Leonard Hood: Yeah, okay. If this happens, yeah. I want this to happen, you know, and you've what people find is



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Leonard Hood: The one size fits all doesn't work, you know, and too often, you run into a lawyer who finds a good what the lawyer believes is a good form every form is drafted for a particular purpose.



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Leonard Hood: And if your client doesn't fit within the confines of that purpose. I mean it, it's an accident waiting to happen.



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Michael Palumbos: Right.



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Leonard Hood: And too often, it does.



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Michael Palumbos: Agree.



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Michael Palumbos: So when when you're pegging evaluation inside of a buy, sell agreement. What are some of the factors. What are some of the things that you like to see talked about inside of that agreement.



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Leonard Hood: Well,



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Leonard Hood: For starters, I am. I'm a big proponent of fair market value.



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Leonard Hood: I believe that fair market value is is fundamentally fair. Now you say, well wait a minute, that comes with valuation discounts. Yes, it does. But those mirror the true economics of the marketplace and



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Leonard Hood: Now, what you see in some agreements, though, is okay. You pick an appraiser I pick an appraiser and then those two appraisers pick an appraiser, and the question is who's paying for all these appraisers



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Leonard Hood: Well I draft it I learned to draft it basically saying, Okay, if we're going to do that. The two appraisers that each side pigs can agree among themselves that one of them will do it. Or they'll pick a third appraiser, but there will be one appraisal.



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Leonard Hood: And people you know when when they, when they get the bill for the appraisal. A they understand what I was talking about, because you know evaluation for an operating company today is



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Leonard Hood: Mean on the low end 70 $500 and there's not many of those. They're more, you know, for a typical



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Leonard Hood: Family Owned Business somewhere between 10 and $15,000 for a for a business appraisal today that's any good right now you can go on the internet and they'll tell you they can sell you a an appraisal for you know 395 but it's going to be worth what you paid for.



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Michael Palumbos: I agree.



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Don Parkhill: I like I like Paul's approach with the three to picking one



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Don Parkhill: My, my preference and I think Paul's is as well as that is to have it appraised today by somebody you know and trust and have that person continue to do it.



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Leonard Hood: That is my favorite approach so



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Don Parkhill: you've established value you've established the firm and if something happens to me. My lovely bride knows it's in good hands the appraisers working for everybody. They've done it before, yada, yada, yada. And that way, everybody gets to know the players and it's all spelled out



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Leonard Hood: You know clients. A lot of times will push back on hat. Why do we need to appraise it now. And of course you've got the original objection, which is how can somebody come in here and tell me



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Leonard Hood: And know more about my business. And it's worth than I do. And I say, well, this because you're not in the business of appraising



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Leonard Hood: And you don't have the training. You know, most I found I have found that very, very few business owners have any real idea about what their business interest is truly worth



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Leonard Hood: They have they either have some pie in the sky thought about it or they undershoot it by a good way



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Leonard Hood: And I've had clients on both ends of that spectrum.



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Leonard Hood: So, get it appraised and then I tell it. And when clients wanted to balk about paying for an appraisal. I said, I said if we get a good appraisal. I said this is



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Leonard Hood: The most valuable management tool, you will ever get because it will identify your competitors, it will talk about it will talk about trends in your industry. It will talk about trends locally in the economy nationally



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Leonard Hood: There's an awful lot that these people can interpret your numbers and really get underneath them because a good business appraiser, the first thing they're going to do is get command to the numbers.



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Leonard Hood: I remember one appraisal in a buy, sell agreement.



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Leonard Hood: With the appraiser, we weren't in the meeting and our yet and the appraiser had already tree. The accountant in a audited financial statement of having to make a sale mid seven figure adjustment to a bit



00:24:58.770 --> 00:25:12.750

Leonard Hood: And it was all because of the persistent questions that the appraiser kept asking that they couldn't answer why and the CPA couldn't answer him either. And he was he was the audit partner.



00:25:13.800 --> 00:25:26.490

Leonard Hood: So that's why, that's why it is just mission critical to to have a good appraisal and if I was personally in business.



00:25:26.970 --> 00:25:40.170

Leonard Hood: You know, if I was in a business that required appraisal. I would certainly do that and maintain it. Every years almost like an Aesop he saw past having an appraisal every year.



00:25:40.230 --> 00:25:41.580

Michael Palumbos: You're right.



00:25:42.780 --> 00:26:01.890

Leonard Hood: You know, and, and the clients that I had that had Aesop's didn't mind it that they didn't find it because because this was work that was ongoing was just like the accountants doing the audit or the review work, it was, it was just part of the routine.



00:26:02.370 --> 00:26:06.900

Michael Palumbos: Love it. You know, it's, it's interesting you know some of the points that you bring up



00:26:07.260 --> 00:26:17.010

Michael Palumbos: The fact that the buy, sell agreement really is also market research. I think that's such a great point that is often overlooked looked



00:26:17.340 --> 00:26:26.370

Michael Palumbos: And, you know, as I'm working with a lot of the family owned businesses today we're talking about strategy and or, you know, what is your go to market strategy, and what are you doing, and



00:26:26.670 --> 00:26:33.810

Michael Palumbos: You know, part of that, you know, really good work comes from understanding your competition at a level that they don't understand themselves.



00:26:34.170 --> 00:26:43.200

Michael Palumbos: And looking for all the services aware your competition is really good. And when you map that out and can look at it all of a sudden it might show this.



00:26:43.500 --> 00:26:48.690

Michael Palumbos: Blank Space. You know that Blue Ocean Strategy just appears because here's where all my



00:26:49.020 --> 00:27:00.630

Michael Palumbos: Competitors are. Here's where they're really good. But just utilizing you know you have to get a, you know, an evaluation. Anyways, utilizing that information, having a third party bring that to you is pretty powerful. Thank you.



00:27:00.840 --> 00:27:06.870

Leonard Hood: It is, and it's a bonus, because as you see everybody thinks they're paying for the number



00:27:08.430 --> 00:27:12.300

Leonard Hood: But that's not the value of a business appraisal.



00:27:12.780 --> 00:27:15.090

Leonard Hood: Yeah, it's so much more than that.



00:27:15.780 --> 00:27:25.680

Michael Palumbos: Agreed. So one of the other things that we talked about was that there's, you know, done any, anything else evaluation or do we



00:27:26.580 --> 00:27:30.600

Don Parkhill: Know it's just such an integral part of your overall planning as Paul mentioned



00:27:31.920 --> 00:27:37.710

Don Parkhill: Because are our clients aren't in the business of buying and selling businesses have appraising them.



00:27:38.400 --> 00:27:51.960

Don Parkhill: They can be way off the mark. And if this is an integral part of their retirement plan. They've got a huge gap. Yeah, and they're saying, well, gee, I guess I'm gonna have to work X number of years because I thought it was worth



00:27:53.040 --> 00:28:02.250

Don Parkhill: Whatever, and now it's worth, you're telling you know it's now it's worth this because they're going by Eva. Right. Well, okay, it's, it's a multiplier of x. Well,



00:28:03.120 --> 00:28:15.450

Don Parkhill: I know john down the road got four times six times eight times whatever well yeah but john had 100 clients all pay and why you've got four clients you lose one of them. It's an issue, right.



00:28:16.020 --> 00:28:28.800

Don Parkhill: Right, yeah. So I said, you know, that multiplier doesn't really apply to you. And so you know this, the fact that they get under the hood and they can tell you things about your operations and and you know



00:28:30.060 --> 00:28:35.490

Don Parkhill: 70% of your employees are over the age of 65 does that raise a flag.



00:28:36.300 --> 00:28:45.570

Don Parkhill: Hmm, it might do potential buyer. Yeah, we were talking about hiring some more people, but they don't want to retire. And so it just brings up so many different things.



00:28:46.050 --> 00:28:56.700

Don Parkhill: That it's as Paul said, it's just not the final number. It helps raise the hood and you've got an Independent Party telling you things about your business that you've just had your blinders on.



00:28:57.570 --> 00:28:59.730

Leonard Hood: I know Michael Michael Gerber



00:28:59.790 --> 00:29:01.560

Leonard Hood: Wrote a book called The game.



00:29:02.970 --> 00:29:12.840

Leonard Hood: And he made the point to that I subscribe to immediately that is you need to spend as much time working on your business.



00:29:13.530 --> 00:29:15.420

Leonard Hood: Work in your business.



00:29:15.720 --> 00:29:27.300

Leonard Hood: And the price, no agreement is a key part of on your of working on your business because as Don pointed out the arm, the whole



00:29:27.960 --> 00:29:39.180

Leonard Hood: The whole area of your unique niche. I've had, I've had appraisals come back where people I the appraiser identified a niche.



00:29:39.510 --> 00:29:49.770

Leonard Hood: That wasn't being filled in the market place that the company jumped into an edit became a company worth a few times what it was worth before



00:29:50.370 --> 00:30:13.890

Leonard Hood: Right, so that's why I think as a management tool, a business appraisal is one of the most valuable for you can hire all the consultants you want, but if you get a good business appraiser that does a full business appraisal and gives you a free standing report that report is is comprehensive



00:30:14.940 --> 00:30:26.760

Leonard Hood: And I mean, they look at so many a myriad of things and you know my first book that I wrote was on business valuation and I wrote it with a business appraiser



00:30:28.530 --> 00:30:32.970

Leonard Hood: Nine years ago that john Wiley publishing and



00:30:35.100 --> 00:30:35.880

Leonard Hood: Yeah, it



00:30:37.320 --> 00:30:48.630

Leonard Hood: You just and a lot of stuff is common sense, y'all. You know, it really is. But as they often say, common sense is not so common, sometimes



00:30:49.260 --> 00:30:57.450

Michael Palumbos: Yeah, but you know it's we get in the mode of doing, you know, and when you're busy doing, you know,



00:30:58.050 --> 00:31:06.510

Michael Palumbos: And making things happen, day to day in the business we sometimes you just don't know. You know, people don't know what questions that they should be asking as they're going through this



00:31:06.780 --> 00:31:13.080

Michael Palumbos: They know which questions to ask their customers so that they can get more sales and you know their clients to



00:31:13.560 --> 00:31:21.720

Michael Palumbos: Turn more revenue. But when you start looking internally, you know, that's what a coach is for. And that's, you know, at the end of the day, that's the difference between



00:31:22.050 --> 00:31:40.620

Michael Palumbos: The three of us, and many of the you know attorneys that are out there, you're more on the coach side of things, though, you're technically and, you know, very, very, you know, appt at what you do, you coach people through these things. And that makes a big difference.



00:31:40.650 --> 00:31:56.070

Leonard Hood: And you ask the rating and can you know count the counseling part of practicing law is paramount, people used to ask me what I did, people who didn't know me and I'd say I practice psychotherapy without a license.



00:31:57.150 --> 00:31:57.570

Leonard Hood: Because



00:31:58.050 --> 00:32:03.870

Leonard Hood: family businesses, there's an, an estate planning, there's a lot of truth in that.



00:32:04.800 --> 00:32:18.870

Michael Palumbos: Agreed. So we talked about before, there's, you know, several, you know, significant issues with, buy. Sell agreements and you know the the kind of hook, we put out there is, which one of these are in yours.



00:32:19.260 --> 00:32:29.790

Michael Palumbos: Don. Do you want to talk about, you know, some of the issues I know we pointed out some of them already. But you know what other issues come up inside a buy, sell agreements.



00:32:31.500 --> 00:32:46.230

Don Parkhill: Well is there so that that fall in the area of life insurance and one is the funding and how much insurance to buy usually that you know if they get the appraisal that's not an issue.



00:32:46.740 --> 00:32:59.730

Don Parkhill: Then the question is what type of insurance do you buy a term or you buy a permanent product or some type of permanent, whether it's true guaranteed to 100 are guaranteed for 35 years or whatever.



00:33:00.780 --> 00:33:08.610

Don Parkhill: You know, time flies and Paul mentioned his experience doing this and the number of years and so forth and



00:33:09.600 --> 00:33:15.210

Don Parkhill: The next thing you know, you turn around you been doing this for X number of years 3035 years and you're still working.



00:33:15.720 --> 00:33:22.170

Don Parkhill: And these guys thought they're going to be retired 10 years ago and they're not. And I can't tell you how many times I've seen



00:33:22.560 --> 00:33:29.130

Don Parkhill: Where the term is expired. And now they got to re up the term and it's got awful expensive and they're saying we're not going to pay that



00:33:29.520 --> 00:33:35.520

Don Parkhill: Okay, so what's the alternative. So just to walk through that and have an understanding



00:33:35.970 --> 00:33:45.480

Don Parkhill: Of how this plays out if they're going to guarantee they're going to retire in X number of years and fine term you're getting, you're going to guarantee your partner that on this day, you're out here.



00:33:46.260 --> 00:33:58.650

Don Parkhill: So, you know, to explore that. And then if they do have life insurance. What happens if one of us retires. What happens the policy on my life. You get to keep that



00:34:00.090 --> 00:34:04.860

Don Parkhill: Do I have to give you years back or sell it to you what's going to happen along those areas.



00:34:06.480 --> 00:34:16.320

Don Parkhill: Another area. I'm curious on your thoughts on this. Both of you were dad is an dad's a partner, two or three other guys, whatever.



00:34:16.800 --> 00:34:27.060

Don Parkhill: And juniors coming up through the ranks junior doesn't have any stock. There's no plans to give junior stock for the next three, five years so Dad gets taken out of the picture.



00:34:28.830 --> 00:34:32.100

Don Parkhill: Does Junior. Junior have a call right



00:34:33.690 --> 00:34:40.830

Don Parkhill: And who's going to make that decision at someone like a trust protector to Paul's point of last will and testament, you put a trust protector.



00:34:41.340 --> 00:34:51.060

Don Parkhill: In the buy, sell agreement that the independent counsel the appraiser the CPA. Somebody says, you know what we think jr has shown his stripes.



00:34:51.480 --> 00:34:59.670

Don Parkhill: And he's entitled to by X percent yes by the fair market value. So those are the things that you know fathers want their sons in business with them.



00:35:00.690 --> 00:35:06.210

Don Parkhill: But a lot of those, buy. Sell agreements don't speak to that. So I'm just curious what you folks see



00:35:08.580 --> 00:35:20.130

Leonard Hood: Well, I agree on the life insurance side there's another interesting issue, and that is, is the life insurance counted as part of the value of the company.



00:35:21.300 --> 00:35:28.320

Leonard Hood: Or is it simply viewed as a pass through and not any impact on value true



00:35:28.860 --> 00:35:33.540

Leonard Hood: But that's, that's the way I think it should be done because that was the purpose of the life



00:35:33.540 --> 00:35:46.170

Leonard Hood: Insurance was to fund the buyout and but it makes a big difference. Especially if you have a big policy, it might. It might really inflate the value of the interest. Mm hmm.



00:35:47.370 --> 00:35:55.710

Leonard Hood: So you got you definitely the buy, sell agreement needs to speak to that, as well as, as you mentioned on



00:35:57.300 --> 00:36:06.210

Leonard Hood: I think people whose policies are no longer needed should have a first dibs at that policy on their life.



00:36:07.500 --> 00:36:12.030

Leonard Hood: Yeah, I mean, it fundamentally fair, you know, going back to that point.



00:36:12.180 --> 00:36:17.160

Michael Palumbos: So sure, yeah. And that's that old saying, Isn't it the last to die wins.



00:36:17.640 --> 00:36:18.030




00:36:19.620 --> 00:36:30.000

Michael Palumbos: Now it. There's, there are so many issues with, buy. Sell agreements that you know we could talk about them for a long time. I think



00:36:30.300 --> 00:36:38.790

Michael Palumbos: One of the other things is, you know, what happens if we disagree. If you don't have that written out inside of the, the agreement.



00:36:39.120 --> 00:36:46.470

Michael Palumbos: There, you know, a lot of times, we've got the death. We've got disability in there might even have divorce in there. But, you know, oftentimes



00:36:46.740 --> 00:36:54.360

Michael Palumbos: You know, if we disagree. That's not written into the end of the buy, sell agreement. What this is triggering for me. Right. The second is



00:36:54.660 --> 00:37:07.620

Michael Palumbos: It's great if you know somebody that's listening to this call says, Ooh, I'm just going to call Paul hood up and ask him for you know consultant my stuff for down Park killer Mike Palumbo is to come and consult you know as we're doing this work, but



00:37:08.190 --> 00:37:22.830

Michael Palumbos: You know, what if they have an attorney that they're working with how do they, how do you know whether your attorney that's working on your buy, sell agreement knows this stuff. The question we didn't talk about before, how would you determine that.



00:37:24.870 --> 00:37:39.870

Leonard Hood: By asking questions of the lawyer, I believe that you ferret out the information, not by simply listening to what they say. Because a lot of people sound like they know what they're talking about.



00:37:40.920 --> 00:37:52.980

Leonard Hood: But when you start asking them things like, well, how many, buy. Sell agreements have you drafted or review, you know, how often do you fool with triggering events and buy, sell agree.



00:37:54.540 --> 00:38:11.670

Leonard Hood: Um, and if they say, well, we've done a few you know we do them mostly for businesses, but not in you find they don't have a lot of experience on the trigger saw



00:38:12.870 --> 00:38:13.470

Leonard Hood: And



00:38:14.730 --> 00:38:26.040

Leonard Hood: To be honest, yeah, that's why I think the fire drill with the buy, sell is so important. I mean, everybody wants to send me their buy, sell agreement to review.



00:38:26.490 --> 00:38:42.060

Leonard Hood: And I said, no, no. Before you pay me to do that. Why don't you read the agreement pretend that somebody dies or somebody gets divorced and and conduct a fire drill read the agreement and play it out all the way through.



00:38:43.170 --> 00:38:56.160

Leonard Hood: And and people come back and they say, my gracious. This is not what we want and and that's that's the answer. I would say 80% of the time, at least in my experience.



00:38:57.390 --> 00:38:57.690

Michael Palumbos: Great.



00:38:58.050 --> 00:39:10.110

Leonard Hood: Or they find out that the procedural mechanism that the lawyer built in is nonsensical. It makes sense when you read it but not when you apply it.



00:39:12.780 --> 00:39:18.150

Michael Palumbos: Thank you done real quick. When you're talking about these triggering events.



00:39:19.650 --> 00:39:29.130

Michael Palumbos: I don't do you know when you're going through, you know, a lot of times if you if you Google, you know, buy. Sell agreements, there's, you know, things out there that talk about the four Ds.



00:39:30.510 --> 00:39:34.530

Michael Palumbos: I think there's, I think you'd agree that there's more than four triggering events.



00:39:34.770 --> 00:39:35.550

Michael Palumbos: Inside of



00:39:35.640 --> 00:39:39.990

Michael Palumbos: A buy, sell agreement. What are some of the other triggering events that people, you know, it's



00:39:40.740 --> 00:39:47.070

Michael Palumbos: That would be a good question. I would think to the attorney you know to ask them, say, you know, when you're writing a buy, sell agreement, how many triggering events.



00:39:47.370 --> 00:39:54.960

Michael Palumbos: Are you going after I think what Paul, you know, Paul had it right you know he's got that one pager. But what are some of the other triggering events.



00:39:55.800 --> 00:39:57.750

Don Parkhill: Well, one that we don't often see is



00:39:58.980 --> 00:40:07.050

Don Parkhill: What if you're no longer able to to participate in that type of business. So if you're an insurance agent and you lose your license or



00:40:07.980 --> 00:40:15.120

Don Parkhill: If you're a pharmacist and you lose your license. So how does that, how does that play out. If you get a divorce.



00:40:15.570 --> 00:40:22.530

Don Parkhill: And my wife gets X number of shares a mind to the other partners have the right to buy her out and then



00:40:23.280 --> 00:40:41.100

Don Parkhill: Do I have a right to buy my stock back. I was not at fault in the divorce and so is it fair to me that I lose x percent of the business to her and those guys, you get the by my partners, get to buy. So should I have a right to buy that back and so



00:40:43.170 --> 00:40:54.570

Don Parkhill: You don't see this very often. But what about lack of something that that brings harm to your reputation. So you've got a premier partner and he



00:40:55.770 --> 00:41:15.330

Don Parkhill: Is drunk and disorderly, not once or twice, but three or four times and you know because he's a good guy in the community. You know, there's no charges brought. But everybody knows about it. Do you want him or her to be a part of your firm and so if the decision is that person goes



00:41:17.340 --> 00:41:29.130

Don Parkhill: And they bring it in quite a bit of revenue but you just really don't want them around. Are you going to pay them 100% for their share. Are they going to get a 30% discount because they've brought



00:41:30.450 --> 00:41:38.970

Don Parkhill: Some negative connotation to your firm, so we don't see very often where different triggering events.



00:41:40.260 --> 00:41:47.280

Don Parkhill: Are paid different amounts. It's usually this is the price is what you get paid. And so long, so



00:41:49.080 --> 00:41:57.720

Don Parkhill: It's not right or wrong. It's what do you think square. Do you think it's fair that he get 100% or should he get 60% or 80% or whatever.



00:41:59.070 --> 00:42:08.190

Michael Palumbos: Love it. Yeah, no, that's really something that people need to think about. I think one of the other things and Paul, I want to ask you about this is when we talk about, you know,



00:42:09.780 --> 00:42:30.060

Michael Palumbos: Xyz corporation comes into town and they want to buy us for $10 million and I you know we're 5050 partners. And I think that's, you know, more than a fair offer and my partner sitting there saying, There's no way I would sell for that. How do you rectify those kinds of situations.



00:42:31.770 --> 00:42:42.150

Leonard Hood: Well, in the equal partners setting that that is difficult it there may have to be some type of sale before the sale.



00:42:43.860 --> 00:42:58.110

Leonard Hood: To clear up that that that dispute. Um, one of the things I wanted to say about the divorce thing is the way that I used to always draft. It was the lawyer. I mean, the



00:42:59.640 --> 00:43:14.430

Leonard Hood: The owner who gets divorced has the prior right to those shares and I always made spouses, be not just acknowledge the agreement to be parties to the agree.



00:43:15.510 --> 00:43:16.140

Leonard Hood: I think, let me



00:43:16.170 --> 00:43:21.330

Leonard Hood: Tell you something clients push back on that. I don't want to involve him or her.



00:43:22.590 --> 00:43:33.480

Leonard Hood: But let me tell you something, I insisted on it so far no man I'm practice law since August 29 2005 the day Hurricane Katrina hit



00:43:34.920 --> 00:43:40.680

Leonard Hood: And I'm going to tell you that I've had three clients so far.



00:43:41.730 --> 00:43:53.520

Leonard Hood: Years after I did work for them, call me and say, I got divorced and thank you for forcing my spouse to sign that agreement.



00:43:54.120 --> 00:44:02.670

Leonard Hood: Yeah, it's made a difference in my life and that those are three people who thought enough to contact me to thank me.



00:44:03.330 --> 00:44:08.550

Leonard Hood: Right. Those there's got to be more out there who just that didn't occur to them.



00:44:09.630 --> 00:44:14.670

Don Parkhill: All I'm curious. Did you primarily start doing that because of community property.



00:44:15.720 --> 00:44:34.530

Leonard Hood: In part for community property, but I believe that, for I mean the way that a buy, sell agreement deals with divorce you know in many states. Today we have equitable equitable distribution. Mm hmm.



00:44:35.550 --> 00:44:56.430

Leonard Hood: And it may be that the spouse is going to get some percentage of value, but I never let the owner lose control of that interest. I was I was firm against that, because the the spouse wasn't part of the company and



00:44:57.900 --> 00:45:06.210

Leonard Hood: You know, it may be that the owner has to take less of other assets to to compensate



00:45:06.930 --> 00:45:16.410

Leonard Hood: What they usually don't want to lose and certainly don't want to have to buy their interest back from their partners. If you give the partner a



00:45:17.340 --> 00:45:43.980

Leonard Hood: Chance another I'll tell you this to another event that that often comes up is when a when a, an employee owner resigns and intends to compete. And let's say that you know non compete agreements vary greatly in their effectiveness but um



00:45:45.180 --> 00:45:59.640

Leonard Hood: If there is a put on the part of the of the shareholder who's leaving, you're basically financing their competition by paying them their interest.



00:46:00.000 --> 00:46:10.560

Leonard Hood: Right, so I had different terms for pay out of those interests and sometimes a different price. Sometimes a different price so



00:46:11.370 --> 00:46:21.180

Leonard Hood: There's a lot that it's, there's a lot of counterintuitive things and I buy, sell agreement. And once again, I go back to my because I'm a pretty simple.



00:46:21.900 --> 00:46:43.530

Leonard Hood: Country kid and and I believe in in common sense and that fire drill usually gets to the bottom of most problems because when people are forced and now they have some skin in the game. Now they've actually read their agreement because most of the time they have it.



00:46:45.060 --> 00:46:58.410

Leonard Hood: They signed it, but they didn't read it and that violates the old you know Spanish proverb, you know, drink, nothing without seeing it poured side nothing but without reading it first.



00:47:01.200 --> 00:47:08.910

Michael Palumbos: So true. I'm in the world of, buy. Sell agreements, you know, some terms are thrown around out there.



00:47:09.930 --> 00:47:18.390

Michael Palumbos: Like Russian roulette or sealed envelope, Don. Do you want to talk about those for a little bit. Where do they come into play.



00:47:19.050 --> 00:47:20.640

Don Parkhill: Well, it goes back to



00:47:21.780 --> 00:47:34.200

Don Parkhill: The partners that are getting along and somebody's going to buy and somebody's going to sell. And the question is, if it's the Russian Roulette. Then I'm going to give you a price. And if you don't like it.



00:47:35.580 --> 00:47:45.360

Don Parkhill: Then I'm going to buy you for that price if you like it, you're going to buy me for the price. The problem is when we're fighting. Nobody wants to put the price on the table first



00:47:46.500 --> 00:47:56.580

Don Parkhill: So if we're going to have that kind of provision my preference would be a sealed bid and we handle each other and the cards fall where they may.



00:47:58.110 --> 00:47:59.040

Don Parkhill: Because



00:48:00.510 --> 00:48:04.050

Don Parkhill: We gotta be reasonable, because I could be selling it to you for that price.



00:48:04.440 --> 00:48:09.840

Don Parkhill: Right. Same applies to Russian Roulette. But you got to get somebody to move on that provision, whereas with the sealed big



00:48:10.920 --> 00:48:12.360

Don Parkhill: Time date. Here it is.



00:48:13.830 --> 00:48:14.280

Michael Palumbos: Got it.



00:48:14.430 --> 00:48:22.200

Leonard Hood: I'm not a big fan of any of those whether you call a Mexican standoff Russian Roulette.



00:48:23.760 --> 00:48:30.840

Leonard Hood: Dutch auction mean there's all sorts of ways this and in my book goes into all of that.



00:48:31.890 --> 00:48:41.790

Leonard Hood: But from my standpoint, it's still going to come down to two fundamental fairness.



00:48:42.480 --> 00:48:57.450

Leonard Hood: And if the business is going to continue. I mean, it, the, the first question is, do they want the business to continue if they can't get along, you know, let's cash in what we've got and just shake hands and call it a day.



00:48:57.990 --> 00:49:03.270

Don Parkhill: Right. That would be the optimal option. Yes, but if they both wanted and they want to continue



00:49:03.330 --> 00:49:04.590

Don Parkhill: But route other



00:49:05.100 --> 00:49:09.660

Don Parkhill: then then then where do you go right. Yeah.



00:49:12.090 --> 00:49:19.860

Michael Palumbos: Love it. So walk through, we got a couple minutes left here, I want to make sure that we cover everything that we that we've talked about



00:49:20.310 --> 00:49:27.450

Michael Palumbos: Or that we said we were going to talk about, you know, critical steps that must be followed before signing and buy, sell agreement.



00:49:27.690 --> 00:49:35.580

Michael Palumbos: And I think, you know, let's see if I've got this right. The first critical step is look at your old agreement and do the fire drill



00:49:36.060 --> 00:49:43.950

Michael Palumbos: A picture is worth 1000 words right and and see what it does, see what you like and what you don't like and then



00:49:44.430 --> 00:49:48.810

Michael Palumbos: You know, from there, I would guess, you know, and then you can fill in the blanks, between the two of you.



00:49:49.680 --> 00:50:00.660

Michael Palumbos: That when you have the new agreement in front of you before you sign it, you do the fire drill again with the new agreement and make sure that that it did all those things that we said we were going to do.



00:50:01.470 --> 00:50:18.840

Leonard Hood: Oh, you bet. You bet. And if you get an agreement, a draft up an agreement back that doesn't comport with what you told them you wanted, then you're gonna have a problem with the agreement, and you probably got a problem with the lawyer.



00:50:19.230 --> 00:50:19.710




00:50:20.850 --> 00:50:32.160

Michael Palumbos: Which goes back to that first. You know, one of the things we were talking about before it. How do you know the attorney know you know that they've got their chops and then they've got it. You know, they can do this stuff.



00:50:34.140 --> 00:50:43.650

Michael Palumbos: And I think, you know, is it fair to ask an attorney for a sample of their a sample, buy. Sell agreement that they've written before take the personal stuff out of it.



00:50:45.990 --> 00:50:58.860

Leonard Hood: That's I've had people I've had people do that before and and I never was offended by that. But I think you do a lot better by simply asking them.



00:50:59.340 --> 00:51:09.930

Leonard Hood: Because for me, and Don, I don't know how how you feel about this. But, buy. Sell agreements where the toughest contract to draft in my legal career.



00:51:10.620 --> 00:51:24.030

Leonard Hood: Because of the number of variables mean you're shooting at a moving target and your and you've got multiple balls in the air at the same time. Yeah. So, so for for me.



00:51:25.350 --> 00:51:44.280

Leonard Hood: You just have to care enough to ask questions. You know, like how many you know how often do you deal with, buy. Sell agreements in particular, you know how often have you taken them from triggering event to closing



00:51:45.030 --> 00:51:56.040

Leonard Hood: You know, you get and you start getting a feel for that. Now, if, if the lawyer is going to misrepresent you know their experience. Well,



00:51:57.480 --> 00:52:00.660

Leonard Hood: There's very little you do about that and



00:52:02.100 --> 00:52:06.330

Leonard Hood: Suffer the bride are simply go get somebody else.



00:52:07.230 --> 00:52:07.950

Michael Palumbos: Fair.



00:52:08.400 --> 00:52:09.720

Don Parkhill: And one of the other things is



00:52:10.770 --> 00:52:14.790

Don Parkhill: You know there are people out there. They don't want to pay anybody for anything.



00:52:16.140 --> 00:52:21.960

Don Parkhill: And they hear you, Michael. And there, you're talking about, buy. Sell agreements.



00:52:22.440 --> 00:52:31.680

Don Parkhill: And the 10 or 12 or 15 or 20 days that you think need to go in there and guys thinking, well we got death and disability wonder what else and so



00:52:32.220 --> 00:52:40.920

Don Parkhill: He goes, a lawyer, maybe has a redrafted in its goodwill and he thinks, well I got I got 10 days. I used to have to. So I'm set



00:52:41.850 --> 00:52:50.790

Don Parkhill: I would recommend that they go to the CPA and say, please read this and let me know how much I'm going to get if my partner's taken out.



00:52:51.330 --> 00:52:59.940

Don Parkhill: And he comes back with this figure, and it's based on book value. Well, wait a minute, the business is worth x times more than that. Well, yeah, but it says



00:53:00.480 --> 00:53:11.940

Don Parkhill: It says book value. So that's going to give you some indication on maybe you should pay somebody to do this not just your, your golfing buddy.



00:53:13.020 --> 00:53:20.280

Don Parkhill: Who happens to specialize in real estate or malpractice or whatever. And he's doing it for you as a favor.



00:53:20.970 --> 00:53:28.650

Don Parkhill: And he's telling you look. Hey, you need to go to a buy, sell special now. Now you're a lawyer, you know, you know, you know what you're doing right, Paul.



00:53:28.860 --> 00:53:38.850

Don Parkhill: Paul, you're a lawyer you know all about divorce you know about environmental protection, you know about professional liability in the medical field architectural field the engineering field you're a lawyer, right. You just know



00:53:40.650 --> 00:53:44.520

Leonard Hood: My answer is you can fit what I know about any of those subjects.



00:53:44.550 --> 00:53:46.740

Leonard Hood: Other than buy, sell agreements in a thimble.



00:53:47.850 --> 00:53:53.850

Don Parkhill: So, but I think if you if you take it to the CPA and get a number from him.



00:53:54.690 --> 00:54:00.360

Don Parkhill: That may open your eyes. And so much of this goes back to what we've talked about over the years and that's collaboration.



00:54:00.840 --> 00:54:17.880

Don Parkhill: Right if folks around the table with CPA needs to be a part of the lawyer, the financial advisor, the insurance guy. The pre and see guy, what have you and and hash this out and give you the best document to protect probably the largest asset that you have



00:54:18.420 --> 00:54:30.120

Michael Palumbos: Right, I have one client that says the most expensive meeting I have is when I bring all of my advisors together for a couple of hours.



00:54:30.360 --> 00:54:39.030

Michael Palumbos: But that expensive meeting saves me hundreds of thousands of dollars over the long run. So it's, you know, they're like they hate



00:54:39.270 --> 00:54:47.850

Michael Palumbos: They hate that meeting, but they know that every time. Good stuff comes out of it because of the collaboration because if you're just looking at something from



00:54:48.120 --> 00:54:55.470

Michael Palumbos: A life insurance perspective, or from a legal perspective or an accounting perspective, something's missing and you need all of those heads.



00:54:55.680 --> 00:55:07.980

Michael Palumbos: at your table, you know, at least once a year, looking at your situation and saying what am I missing, what am I not looking at you guys talk about it, you know, commits among yourselves and figure this thing out for me. Right.



00:55:08.520 --> 00:55:17.640

Leonard Hood: It's kind of like the old FRAM auto filter commercial you pay me now or pay me later. You know, like auto repair guy used to say on the commercial



00:55:19.050 --> 00:55:39.390

Leonard Hood: My goal in a buy, sell agreement is to minimize the need for litigator yeah because when litigators get on the case. The number of hours that they spend is incredible. Right.



00:55:39.540 --> 00:55:40.500

Leonard Hood: I mean, that's



00:55:40.650 --> 00:56:00.390

Leonard Hood: Just that's the nature of litigation. Today it is just very labor intensive and that means expensive. Yeah. So yeah, half K, you're really, you're really the collaborative, it goes back to collaboration to



00:56:01.500 --> 00:56:10.380

Leonard Hood: There's no substitute for there's just no substitute for it because none of us has all the answers. And I know damn well I know



00:56:13.260 --> 00:56:21.180

Michael Palumbos: I get it. Yeah. You know, it's funny. I'm thinking about the family that I'm that I'm working with right now that is going through a buy, sell agreements and it's going to get



00:56:21.210 --> 00:56:26.070

Michael Palumbos: litigated. I'm curious, let me let me share this thought with the up



00:56:26.820 --> 00:56:35.280

Michael Palumbos: What if I were to go to the remaining family members and say you were, you were planning and updating your, your, buy. Sell agreement. I've been asking you to upgrade this for



00:56:35.550 --> 00:56:41.160

Michael Palumbos: You know, several years, but we've been focused on the family dynamics and then everything blew up.



00:56:41.970 --> 00:56:47.790

Michael Palumbos: What if they were to go back and say, You know what, we're going to redo the buy, sell agreement between us right now.



00:56:48.600 --> 00:57:03.420

Michael Palumbos: And will include the person that we pop, you know, pushed out of the business in the new buy, sell agreement that's more fair, isn't that give him a shot at saving the family relationship, it does it.



00:57:03.480 --> 00:57:05.760

Leonard Hood: It absolutely does.



00:57:07.200 --> 00:57:13.170

Leonard Hood: Because it all goes back to again fundamental fairness.



00:57:16.140 --> 00:57:31.830

Leonard Hood: There's just, there's just little there's just little substitute foreign because if your agreement is not fair, you're going to pay money litigating against an unfair are litigating to defend an unfair dream.



00:57:33.360 --> 00:57:40.440

Leonard Hood: And you're going to be stuck with the words on the page that are there, and your agreement and the courts are going to hold you to that.



00:57:40.770 --> 00:58:00.210

Michael Palumbos: Right, love it. Thank you. Alright, done, take us out of here and I'm going to both of you. What I'd like you to do is if you have any parting words, anything that you had, you know, like to add to the what we've just done that. We don't want to miss and then tell us how people can reach you.



00:58:02.520 --> 00:58:05.760

Don Parkhill: So thanks again for putting this together. It's been fun and really enjoyed it.



00:58:07.230 --> 00:58:16.080

Don Parkhill: My advice to any business owner. Listening is to make sure you have quality advisors and just like Michaels client pay to get them around the table.



00:58:16.560 --> 00:58:32.970

Don Parkhill: And have them collaborate, because they're working in your best interest. Everybody has a different way of thinking about certain particular issues and it's good to have everybody talk about them and get them aired out and let them look out for you. Best way to reach me is my email.



00:58:34.170 --> 00:58:43.770

Don Parkhill: Which is just my name. Don dot Park hill at LLC. COM. I'm a member of blue stone wealth partners, you can look us up on the internet and



00:58:45.720 --> 00:58:47.010

Don Parkhill: My cell number is some



00:58:49.980 --> 00:58:54.660

Don Parkhill: Road to to a one one for since I'm still pretty much out of the office.



00:58:55.860 --> 00:58:56.340

Michael Palumbos: Agreed.



00:58:56.370 --> 00:58:57.000

Michael Palumbos: Thanks again.



00:58:57.690 --> 00:58:59.310

Michael Palumbos: Thank you, Paul.



00:59:01.200 --> 00:59:09.090

Leonard Hood: My parting words are still what I talked about earlier, which is fire drill. Yeah.



00:59:09.360 --> 00:59:11.040

Michael Palumbos: I knew fires.



00:59:11.340 --> 00:59:13.860

Leonard Hood: Powerful man don't hire somebody



00:59:14.160 --> 00:59:29.580

Leonard Hood: Don't don't hire somebody to review the agreement until you've done the fire drill, because the fire drill will guide you throughout the new by cell process.



00:59:30.300 --> 00:59:55.050

Leonard Hood: My email address is Paul at Paul hood H O D and my cell phone is 504 I still got my Louisiana by cell. I mean by Bruce by Louisiana phone number. I've had the same cell phone number for over 25 years 50445 to 7574



00:59:56.910 --> 00:59:57.990

Michael Palumbos: Thank you very much.



00:59:59.580 --> 01:00:03.030

Michael Palumbos: You guys. I really appreciate you joining me today.



01:00:04.350 --> 01:00:06.060

Michael Palumbos: Don you had picked up on.



01:00:07.110 --> 01:00:13.470

Michael Palumbos: Our invite had a 1pm start time and that looks like. We will never make that mistake ever again.



01:00:15.210 --> 01:00:25.230

Michael Palumbos: You guys were awesome. Really appreciate it and if anybody wants to reach out to them. Definitely take them up on their services and their time.



01:00:26.280 --> 01:00:39.960

Michael Palumbos: I'm Michael Columbus and this was the family, Big Show and we look forward to speaking with you and have any on in the future we can help you at any time, you know, just let us know. Thanks everybody.



01:00:40.650 --> 01:00:41.730

Don Parkhill: Thank you, Michael.



01:00:41.850 --> 01:00:43.560

Don Parkhill: Thanks, Paul. Good to see you guys. Take care.



01:00:43.950 --> 01:00:44.520




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Michael Palumbos is a registered representative of Lincoln Financial Advisors Corp. Securities and investment advisory services offered through Lincoln Financial Advisors Corp., a broker/dealer (member SIPC) and registered investment advisor. Insurance offered through Lincoln affiliates and other fine companies. Family Wealth & Legacy, LLC is not an affiliate of Lincoln Financial Advisors Corp. Lincoln Financial Advisors Corp. and its representatives do not provide legal or tax advice. You may want to consult a legal or tax advisor regarding any legal or tax information as it relates to your personal circumstances.