Monterey Bankruptcy Attorney Discusses McDonalds and Chipotle Grill End Business Partnership, Shareholders Exchange Chipotle Class B Shares for Common McDonald’s Shares
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.
Whether you are two big companies partnered together or partners in a smaller business, it is important to have a shareholder’s agreement.
Here are some reasons why:
· One shareholder quits to move to another city or leaves to start another business. Without an agreement, you must decide whether you should buy out the departing shareholder's ownership interest and for how much. If you're the shareholder who wants out, without an agreement you won't be able to force your co-owners to buy you out.
· One shareholder dies, gets divorced, or becomes mentally or physically incapacitated. In this case, you might have to work with the spouse or other family member of a deceased, disabled or divorced shareholder. There is a substantial possibility that the family member would be inexperienced or otherwise unable to act in the best interests of the business. On the flip side, you (or your family) might get stuck with a small business interest that no outsider wants to buy and for which no insider will give you a decent price.
· One shareholder sells his or her share to a stranger or to someone you know well and can't stand. In this case, you may be forced to share control of the company with an inexperienced or untrustworthy stranger -- or you'll be faced with the struggle of running a business with someone you'd rather not even see on the street.
A partnership can dissolve when one or both partners decide to end the partnership or the terms of the partnership have been completed. By law, dissolution can also take place when a partner dies, leaves, or go files for bankruptcy.
When a partnership ends, partners can form a new partnership or change the form of the business organization.
Sagaria Law, P.C. works with clients in all matters related to business formation and bankruptcy. If you are located in the Santa Clara County, Monterey County, and Alameda County, and you would like to form or dissolve a partnership or create a shareholder’s agreement, contact Sagaria Law, P.C. for a free consultation. We are here to help you.
McDonald's Boosts Profits By 15%, Whittier Daily News.com, October 31, 2006
McDonald's, Chipotle End Partnership Agreement, Clarionledger.com, October 14, 2006
Partnership, Iastate.edu
Related Web Resource:
Creating A Partnership Agreement, Nolo.com
