Complex Joint Venture Exit

Cross-Border Divestment of an Interest in a US-Based Securities Brokerage Firm

Background

Our client held an indirect majority interest in a US-based securities brokerage firm but did not control daily operations, which were managed by a minority interestholder.
The business was loss-making and required ongoing capital injections. Seeking to divest its entire interest, our client faced active resistance from the minority interestholder, who blocked sale discussions and limited access to information.
The transaction was further constrained by governance requirements, including board approval for exercising contractual rights, and the need to coordinate across multiple jurisdictions.

E&L identified enforceable legal rights, including the drag-along mechanism, and developed a strategy to compel participation from the minority interestholder.
E&L coordinated with legal counsel across New York, Delaware, and Singapore to align legal and commercial strategy.
E&L structured a two-stage transaction with a consortium of employees, incorporating conditional disclosures and regulatory approval requirements.
E&L led negotiations, managed stakeholder alignment, and coordinated the execution process, including addressing pricing adjustments based on newly disclosed financial information.

The issuance of the drag notice compelled the minority interestholder to engage, resulting in execution of the sale agreement within 15 days.
The transaction achieved its first closing, with the buyer acquiring a portion of the interests from both shareholders.
E&L maintained coordination across all parties and ensured the transaction progressed despite initial resistance and structural complexity, with the final closing pending regulatory approval.