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  1. #41
    Join Date
    May 2007
    Posts
    37,714

    Default Re: Syndicate Agreement Legal Question

    Quote Originally Posted by Portofino View Post
    Which is what I twigged in post #4 .
    Yes, your 'money pit' phrase had a certain resonance...

  2. #42
    Join Date
    Dec 2015
    Location
    Poole
    Posts
    229

    Default Re: Syndicate Agreement Legal Question

    Quote Originally Posted by petem View Post
    Thanks that's very generous of you and could be useful for others.

    Will put something up for review as soon as I get time.
    Sounds very useful solution. been interesting thread. Hope you get a satisfactory and agreeable outcome Pete.

  3. #43
    Join Date
    May 2001
    Location
    ation, Loc: ation, Loc: ation.
    Posts
    16,321

    Default Re: Syndicate Agreement Legal Question

    Quote Originally Posted by bluetooth View Post
    Sounds very useful solution. been interesting thread. Hope you get a satisfactory and agreeable outcome Pete.
    Thanks, it's not really a contentious thing, more improving clarity and robustness of the words.

  4. #44
    Join Date
    May 2001
    Location
    ation, Loc: ation, Loc: ation.
    Posts
    16,321

    Default Re: Syndicate Agreement Legal Question

    Quote Originally Posted by benjenbav View Post
    As you might say, 'if you want to get to there, I wouldn't start from here'.

    Before going into any contract it's important to know (a) what you want to get out of it and (b) what your exit looks like. If your answers are (a) happiness and (b) don't be so negative, then you will either get lucky or you won't.

    The first difficulty with the quoted wording is that it's not aimed at giving anyone what they actually want.

    The second difficulty is the portmanteau phrasing. There are so many conflicting ideas rubbing up against each other that it really is anyone's guess what it means. One idea per sentence, please.

    Apart from that critique, I agree entirely with jfm. It's a fairly damning indictment that we are on #30 and all of us above average intelligence. Yet no-one knows what this means.

    If it's not too late, I would be tempted to go back to the syndicate and design a clear exit so that, if anyone wants out, they actually know what is possible and how to achieve it.

    Mind you, if you really want obscurity and obfuscation you could always try exiting a family trust over French real estate. Suffice it to say I have the t-shirt. It says 'Speak to me, Goose' on the front.
    Thanks. Working in IT I'm more comfortable with flow charts so that's where I'll start. I/we can then look at the drafting to reflect the logic.

  5. #45
    Join Date
    May 2001
    Location
    ation, Loc: ation, Loc: ation.
    Posts
    16,321

    Default Re: Syndicate Agreement Legal Question

    Having read all the comments above, particularly those of Porto's and others with regard to not getting trapped, this is what I think the process should look like...



    Any comments before I attempt to turn this into some clauses?

  6. #46
    Join Date
    Jun 2005
    Posts
    303

    Default Re: Syndicate Agreement Legal Question

    Quote Originally Posted by petem View Post

    Any comments before I attempt to turn this into some clauses?
    Do the remaining members have any say in who the exiting member sells to? (Can exiting member sell to a known complete git?)

  7. #47
    Join Date
    Apr 2011
    Location
    Boat- Western Med
    Posts
    5,205

    Default Re: Syndicate Agreement Legal Question

    I think in an ideal world , if it’s worth trying to aspire to ? ——- . For certainty of ALL ( wether a member takes up the usage or not) there should be a minimum “ buy in time “ agreed before the syndicate forms .
    Say a not unreasonable 3/5 years .
    In this period nobody can get out .
    This ensures there’s certainty of 3 / 5 years “ as is “ for enjoying the experience.
    Furthermore to lock a potential “ cocker offer “ in the members put a rough projected running share up front in an escrow account during this period .Mooring and est maintenance/ service agreed projections .
    After the “ initial period “ ( agreed at the onset ) then the RYA normal get out contract clauses are fine , or any other get out .
    But as said the getter outer needs certainty that after he has served his pre agreed notice that’s it - out - finish .
    A trade price pro rata price should suffice.

    Or just dissolve it after the pre agreed time 3/5 years .Sell up and divi up .
    Some may enter into another similar time limited agreement with a updated boat , others may walk away and do something ( boaty ) different .

    The thing is this way there s a known protection period for those who like the status quo and a known end time together.

  8. #48
    Join Date
    Sep 2011
    Posts
    2,232

    Default Re: Syndicate Agreement Legal Question

    Quote Originally Posted by TheOrs View Post
    Do the remaining members have any say in who the exiting member sells to? (Can exiting member sell to a known complete git?)
    I have thought this all along, the new share owner could be such an ar5e you wouldn't even want to deal with them but have no choice! How do you know they have the money or the will to spend on maintenance, insurance, berthing?? Nightmare!!! When the three of you purchased the boat it was easy but to add another unknown? The new share owner could have purchased the share at a very cheap rate and force you to sell at a megga loss also! It would be easier if you owned the boat outright and sold the shares. The contract you have isn't worth the paper it's printed on as pointed out by JFM. I guess that is the worse case scenario and all the players are mates in the syndicate but I would strongly advise getting a better contract before you take on another.

    Your second box in the flow chart is floored also, why would one of the remaining owners want to own two thirds of a boat? Two thirds of all the running costs?

  9. #49
    Join Date
    Feb 2015
    Location
    Conwy
    Posts
    4,072

    Default Re: Syndicate Agreement Legal Question

    My head is starting to hurt. I'm beginning to think a boat share be restricted to a husband and wife thing. He buys it, she owns it so he better play ball. The natural order of things and all. Too complicated otherwise.

  10. #50
    Join Date
    May 2001
    Location
    Jersey/Antibes
    Posts
    22,545

    Default Re: Syndicate Agreement Legal Question

    Petem the flow chart is not unhelpful as a concept but doesn’t go anywhere near covering everything that needs to be covered. A few points.
    1. The green wording -NO!- don’t confuse ending someone’s share with ending the agreement, as RYA did. Basic schoolboy error. Some rights and obligations in the agreement might need to survive the sale of the boat share.
    2. Think carefully because in all divorce clauses (eg company joint ventures, from which I’ve made a fortune with clients spending inordinate time stupidly negotiating) you are pulling the trigger without knowing which way the gun is pointing. This thread has a bias towards getting a nice outcome for Petem when the other guy wants out. But what if you want out Petem? So before you write a clause that prevents the getter outer selling his share to a horrible person, decide whether that clause is likely to help or hurt you. What if you want out and the other two refuse to bless the person you’re selling to, even though he/she isn’t a bad bloke? You’re knackered and don’t get your money.
    3. You need to think about enforcement. Say you want out and it goes to the part of the process where the whole boat is sold. What if another partner doesn’t want out and subverts the sale?. What if he just goes sick the day he is meant to hand in his BoS to the new 100% owner? You can’t sue him for damages and you will lose your buyer long before you get a court judgement for specific performance, so what are you going to do? You need a PoA clause. When you write a rule you need to think about what leverage you have to force compliance.
    4. You need to agree on obligations after the sale.
    5. I think a backstop date as mentioned above is a smart idea. 4 years maybe, then sell whole boat. You can always override it unanimously.

    So it’s much more involved than your chart.
    As you know I did a share way back in 1999 and 2004. I chose partners who would be so nice that we would never need to read the agreement and that turned out true except that both wanted out(at different times) before me. So I think the exit/divorce clauses matter. As it happens I knew at the start which way the gun was pointing (namely, I would be the remainer) so made sure the clauses worked ok in that scenario. It’s handy if you can predict the future

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