Stephen and his brother James owned SJ Farms Ltd. Both took a salary from the company and they received dividends. They employed Alfred and Lionel as farm-hands, who received a salary and tied accommodation.
Stephen and James were approached by Wheat Holdings Limited who made a generous offer to buy their farm. They made an offer to purchase the brothers’ shares, together with the assets and goodwill of the business.
Wheat Holdings Limited made it a condition of the sale that the purchase could only take place if there were no employees on the books, and the costs of doing this would have to be met by Stephen and James.
Stephen and James approached us for legal advice.
We helped Stephen and James manage the fair exit of their employees, ready for the sale. We advised on the various employees’ rights and the different options open to the directors, highlighting the timescales, risks and potential costs in each situation.
We agreed a strategy which involved supplying Settlement Agreements for both of them and their two employees. In the case of Alfred and Lionel, we ensured that Stephen and James were offered fair compensation for waiving their rights so that the “sign off” by their independent solicitor went smoothly.
Stephen and James also signed a Settlement Agreement waving their rights to bring claims for a small amount of consideration as they were benefiting from the sale.
Wheat Holdings Limited were satisfied that there were no longer any potential employment claims that could be brought against the Company they were acquiring. This enabled the share sale to go through smoothly and quickly which also benefited our clients.