California Bankruptcy Lawyer Blog

Monterey Bankruptcy Attorney Discusses McDonalds and Chipotle Grill End Business Partnership, Shareholders Exchange Chipotle Class B Shares for Common McDonald’s Shares

The world’s largest fast-food company no longer owns shares of the gourmet burrito and taco company. McDonald’s Corp. and Chipotle Mexican Grill, Inc. are terminating their partnership after eight years. McDonald’s had bought a stake in Chipotle when the company only had 14-restaurants located in Denver and helped turn it into a national chain while leveraging some of McDonald’s resources.

The decision to end their business partnership will give Chipotle more flexibility to grow and let McDonald’s focus on its core group of brands. Shareholders were allowed to exchange 16.5 million Chipotle Class B shares for 18.6 million common McDonald’s shares.

“Buy-Sell” provisions in shareholder’s agreements governs certain business decisions:
· Who can buy a departing shareholder's stock (this may include outsiders or be limited to other shareholders).
· What events will trigger a buyout.
· What price will be paid for a shareholder's interest in the corporation.

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Redwood City Bankruptcy Attorney Discusses Federal Reserve Survey Say Small U.S. Firms Are Expanding Their Financing Sources

From 1999-2003, in the United States, the Federal Reserve says that more small business looked to non-banking sources, such as brokerages, finance and leasing companies, venture capitalists, relatives, other individuals, and credit/debit-card processors, for financial services.

Survey results were based on information on 42,400 U.S. firms.

A majority of the firms surveyed were small, owner-managed businesses. More than 80% of the firms surveyed had less than 10 employees.

Survey results show that commercial banks, however, were still the dominant provider of checking accounts, loans, lease financing, and credit lines. Small business also increased their use of “nonstandard work arrangements,” including working with consultants and contractors.

Of the companies surveyed, 47% of small firms registered as corporations (31% were “S” corporations and 16% were “C” corporations).

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