Commercial Investment Real Estate

JAN-FEB 2018

Commercial Investment Real Estate is the magazine of the CCIM Institute, the leading provider of commercial real estate education. CIRE covers market trends, current developments, and business strategies within the commercial real estate field.

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CCIM.COM January | February 2018 19 someone else. Agree on a deadlock rem- edy before those situations arise. Some commonly used mechanisms for resolving a deadlock include the following. Russian Roulette: A Russian roulette provision requires one of the two dead- locked parties to serve a notice on the other party. The serving party names an all-cash price at which it values a half interest in the business. The party receiving the notice can opt to buy the other party out or sell out to the other party at that price. Texas Shootout: Another dramatic solution is a Texas shootout, where each party submits a sealed all-cash buyout bid to an umpire. The highest sealed bid wins, and that bidder must then buy and the loser must sell the other its share in the business. Mexican Shootout : This variation on the Texas shootout requires both parties to submit sealed bids indicating the mini- mum price for which they would be prepared to sell their share of the business. The highest sealed bid wins, and that bidder buys the loser's share at the price the loser submitted. This list is not comprehensive, and the appropriate solution for any given company depends on the indi- vidual company circumstances. Also whenever possible, deadlock reso- lution mechanisms should be used only as a last resort. It typically is advised that deadlocked parties should be given a period of time, such as 15 to 30 days, to try and work things out between them- selves without any third party interven- tion. If that stalls, the parties should have another 15 to 30 days to mediate with a neutral third party. If a deadlock still exists after media- tion, then one of the three deadlock mechanisms can be used to avoid court intervention. With the deadlock mechanism clearly defined in the company's governing document, the expectations of the par- ties will be appropriately managed. As a result, the court will be prevented from dissolving or forcing a sale of the company if a corporate stalemate occurs. Ryan Olson is an associate at Dawda, Mann, Mulcahy & Sadler, PLC, in Bloomfield Hills, Mich. Contact him at rolson@dmms.com. The complexities of resolving professional disputes or dissolving a professional connection can make business relationships even more fraught than personal breakups. Life with The Pin Experience life with the pin. Visit www.ccim.com/benefits CCIM Institute provides its members with the most sophisticated knowledge, technology, and operational platform to power their business. CCIM Membership Benefits: Lifelong Learning Free and discounted courses covering crowdfunding, big data, and more. STDB The industry's best digital toolkit for market analysis. FindaCCIM.com and CCIM Connect An exclusive global network for business and industry intelligence. CIRE Magazine Subscribtion The award-winning publication that covers market trends and innovations. Affinity Provider Program Exclusive discounts on travel, tech tools, printing, and more. DealShare A database of listings not found anywhere else.

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