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Steele Weighs in on What Happens When Investors and Founders Collide

October 9, 2017

At the International Bar Association’s annual conference in Sydney, partner Myron Steele participated in a panel titled “When Investors and Founders Collide: Preventing, Diffusing and Resolving Disagreements About Corporate Strategy, in Good Times and in Times of Financial Crisis.”

The panel covered a broad range of topics, including:

  • Governance best practices to avoid deadlock or prevent a veto situation that could paralyze the company
  • Funding through revenue or investment: anticipating mechanisms for additional capital contributions that address anti-dilution concerns while realistically providing cash-flow support in times of financial crisis, or at times when the founder and other constituencies disagree on a growth strategy
  • Consideration of how related party transactions affect the dynamic
  • The additional stress placed on the decision-making process if the company also faces a time of financial crisis when the consideration of insolvency or bankruptcy concepts comes into the equation, and planning for 'distressed funding' options
  • Lawyering in times and crisis, identifying 'who is the client' and the use of special committees

The multinational panel included representatives from Australia, Brazil, France, Switzerland and the U.S.

IBA 2017 Sydney