Monday, August 15, 2005

I called a meeting with just the Class A partners — not telling them what the meeting was about — and we planned to meet at the office thirty minutes after closing time. Sad to say about my own company, but thirty minutes after five o'clock, and you don't have to worry about running into too many employees. In fact, there was just one employee there, the one named Eric that I wanted to make a partner offer to that George doesn't like, and he left just as we got around to starting the meeting.

I debated about how to discuss this with the partners, and finally decided I should tell the Class A partners about my decision first. Part of this is a legal matter: If I offer my shares for sale, they have the right of first refusal, meaning they can buy them before the Class B partners even have a chance.

Because David is still a good friend (while Jack and I rarely speak), I thought about telling him first (and wish in retrospect that I had), but I told them the news at the same time.

There wasn't much to say, and to my own surprise it was easy to say:

I called this meeting to announce that I plan to leave this company and this town no later than early next summer, and my interest in the company is for sale. My entire ownership in the company is now for sale for. We've talked recently that the company may be worth $12K per share, and seeing that whoever buys my interest will have controlling interest in the company, the shares may be worth even more.

You need to read our Operating Agreement, but my understanding is that as Class A partners, you have the first option to purchase these shares, so I'm offering them to you first. According to our bylaws you have thirty days to make a decision to buy them or not, at which point I can make them available to the Class B partners.

Business partner’s reactions

Jack and David's initial reaction seemed to be shock, perhaps in the bluntness of my approach, but David eventually said he thought this would happen when he learned that my wife and I were separated. (Again, someone telling me this would have been helpful.)

There were a lot of questions like "Why?", and "Are you sure?", and I answered them as much as I felt like. The truth is, David and Eric are my only "friends" at the company, guys I'll stay in touch with after I leave, so I thought none of my decision-making was anyone's business in general. However, I made it clear that my wife had nothing to do with my decision, other than that being married to her was what brought me to this town.

By the end of the meeting, it seemed like David and Jack had absorbed what I had to tell them, and while I don't know how they were feeling, I felt great. Shoot, I was ready to hop in the car and drive off into the sunset, but unfortunately I still had to stay; there was this little matter of selling my ownership before I left. I knew I wanted to leave by the spring or early summer, but I also didn't want to walk away from at least a six-figure deal before I left.

At this point I lied, and told them I had several people outside the company that might be interested in buying my shares, but that I had to follow the bylaws of our Operating Agreement. I told them I'd rather sell to all of the current partners, but if we couldn't work something out, that I also thought I had some possibilities, people that could afford to buy my interest but not the entire company. I told them this was why I had already looked at the Operating Agreement, and knew about the thirty day terms.

Before the meeting was over we decided to get in touch with the company lawyer, and see what ground rules we needed to follow during this process. I had read enough of the Operating Agreement that I knew I needed to talk to the Class A partners first, but I wasn't nearly as sure about where to go from here.

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