Buy-Sell Agreements

San Diego Buy-Sell Agreement Attorneys

A buy-sell agreement controls what happens to a closely held business when an owner dies, becomes disabled, retires, divorces, files for bankruptcy, or simply wants out. Without one, the business often ends up in court — with the surviving owners forced to negotiate with the departing owner's family or estate at the worst possible moment. Khashayar Law Group drafts buy-sell agreements that work when they're needed and stay current as the business changes.

Buy-Sell Structures and Triggering Events

Common structures include:

• Cross-purchase — remaining owners individually buy the departing owner's interest.
• Redemption (entity purchase) — the entity itself buys back the interest.
• Hybrid (wait-and-see) — gives the entity or the remaining owners the option after the trigger event.
• One-way — used in single-owner-plus-key-employee contexts.

Typical triggering events include death, disability, retirement, termination of employment, divorce, bankruptcy, voluntary withdrawal, and "for-cause" expulsion. Each trigger should specify the valuation method, payment terms (lump sum vs. installment), and funding source (typically life or disability insurance for death/disability triggers).

Why California Buy-Sell Agreements Get Litigated

Disputes usually arise when a buy-sell agreement is silent on the actual triggering event, the valuation method produces an unfair result years after drafting, or the payment terms become unaffordable. The firm drafts buy-sell agreements to anticipate these problems and reviews existing agreements every 3–5 years (and after major business changes) to keep valuation formulas, payment terms, and triggering events current.

How Khashayar Law Group Handles These Matters

Khashayar Law Group approaches every matter with the same trial-ready discipline that produced over $165 million in recoveries firm-wide. Daryoosh Khashayar has tried cases before juries, before judges, and before the California Court of Appeal, where he has secured multiple reversals of Superior Court rulings. He has litigated against major insurers including GEICO and Progressive, and against large corporations including Walmart and Costco.

ABOTA Membership and What It Means for Clients

Daryoosh Khashayar is a member of ABOTA — the American Board of Trial Advocates, an invitation-only organization for attorneys with exceptional verified civil jury trial experience and judicial recommendations. The firm has recovered more than $165 million for clients and prepares every matter — transactional or litigated — with the trial-readiness corporate counterparties respect.

Frequently Asked Questions

What's the difference between cross-purchase and redemption buy-sell agreements?

In a cross-purchase, the surviving owners buy the departing owner's interest individually — they get a step-up in basis. In a redemption, the entity buys the interest — there is no individual basis step-up, but the structure is simpler with many owners. Hybrid structures combine elements of both.

How is the buyout price determined under a buy-sell agreement?

By the valuation method specified in the agreement: a fixed price (revised periodically), a formula (often EBITDA multiple or book value), an appraisal process (one or three appraisers), or a shotgun (one party sets the price, the other chooses to buy or sell). Each method has tradeoffs.

Should a buy-sell agreement be funded with life insurance?

Often yes for death triggers. Life insurance funds the buyout without straining cash flow, and the policy structure (cross-owned vs. entity-owned) interacts with the buy-sell structure. Disability insurance funds disability triggers similarly.

How often should we update our buy-sell agreement?

Every 3–5 years, after any major business change (new owners, major financing, business pivot), and any time the valuation formula no longer reflects the business's actual value.

Can a divorce trigger a buy-sell agreement?

Yes, when drafted to. Many buy-sell agreements include a divorce trigger that requires the divorcing owner to buy back any interest awarded to a spouse, keeping ownership inside the original group.

Talk to a San Diego Buy-Sell Agreement Attorney

Khashayar Law Group serves clients throughout San Diego and California. Consultations are free and confidential. Call (858) 509-1550 or visit our office at 1350 Columbia St., Suite 303, San Diego, CA 92101.