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Advised seller on the sale of shares in family-owned business, Retailquip, to international buyer, Finnish logistics company K.Hartwall.
Retailquip offers a range of material handling equipment and supply chain solutions across Australia and New Zealand. Managing Director of Retailquip, Clare Hart-Davies, will continue managing the operations of the business. She says she was grateful for Redchip Lawyers’ guidance throughout this milestone transaction:
“Peter and the Redchip team were a constant source of guidance and support for us throughout our diligence process and contract negotiations – reliably providing proactive, thorough and clear advice.
“Peter really took the time to understand our business and our family situation on a personal level, and this allowed him to provide tailored and rational advice. Nothing was too much trouble for the Redchip team who were always responsive in meticulously and patiently translating legal concepts that were foreign to us, to ensure we understood each step and were prepared for the next. We would undoubtedly recommend Redchip and work with them again in the future.”
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The executors of a complex estate came to Redchip to resolve problems created by the deceased’s insufficiently drafted Will, with the goal of avoiding a litigious battle with beneficiaries.
The Estate
The majority of the deceased’s assets were held in companies and trusts, so his personal estate itself had very little funds.
There were over 30 entities to consider including unit trusts, discretionary trusts, companies and corporate trustee companies. Some of these entities were controlled solely by the deceased, whilst others had the involvement of the deceased’s family members. There were also several inter-connected loans between the entities that ultimately impacted the distribution to the beneficiaries.
The Key Issues
The deceased’s Will was not appropriately drafted to manage the extent of his assets, entities and complex relationships.
There were assets of the deceased that were intermingled with the assets of various other family members, without adequate succession planning behind them. His passing therefore impacted surviving family members’ businesses and business assets.
Several entities controlled by the deceased were not mentioned in his Will at all. Under the terms of the governing documents of these entities, their control defaulted with the executor of the deceased’s estate, who then had to appoint a suitable person to take control. The challenge here was that the family members were not on good terms, so no one was allowed to be the sole controller; but, at the same time, no one was prepared to act jointly with another.
There was also an issue of the related loans between entities creating an unequal distribution to beneficiaries, which the beneficiaries predicted would be challenged.
The Solutions
The first step was to gain clarity over the extensive estate assets. Our estate experts collated all relevant documentation including missing trust deeds, trust deed amendments, company constitutions and the financials of each entity to understand the existing succession mechanisms in place.
Our experts devised a strategy to restructure the distribution of the assets and satisfy all beneficiaries without the estate turning litigious. This involved open and transparent round table discussions on behalf of the executors with the beneficiaries.
Ultimately, the beneficiaries were pleased with the strategy and outcomes, and a settlement deed was drawn up.
Through Redchip’s solutions, the executors of the estate were able to offer the beneficiaries and the future controllers of the deceased’s entities a solution to save over $550,000 in transfer duty costs that would have been incurred had the assets been carved up amongst the various beneficiaries in accordance with the original Will.
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Our Estate Planning experts helped our client safeguard his property for the future benefit of his children.
A couple own a property as tenants in common, split as 90% to one partner and 10% to the other. The majority owner had purchased this property prior to his relationship and, rather than include this property in the balance of his Estate, wished to separately hold it to transfer to his children after his passing. The minority owner, his wife, was supportive of this arrangement.
In most circumstances an Estate’s assets will transfer directly to a spouse upon one partner’s passing, so this arrangement required additional planning and structure.
Estate Planning Solution
When drafting the couple’s Estate Plans, the minority property owner’s Will set that her 10% share of the property would transfer directly to her husband on her passing.
In the Will of the majority property owner, our Estate Planning experts devised a strategy whereby his interest in the property would be gifted to a Lineal Descendants Testamentary Trust. His wife (if she survives her husband) would become the trustee and principal of the trust, providing her with control. She would also be nominated as an income beneficiary of this trust, along with the couple’s two children, allowing her to benefit from any income generated by the trust and allowing her to remain living in the property.
The two children – and any future direct bloodline relatives – would be capital beneficiaries of the trust, meaning that they receive the benefit of the property, or proceeds of the property if sold.
What Does This Mean for You?
Implementing a Lineal Descendants Testamentary Trust in your Estate Plan is an effective tool for protecting the legacy you wish to leave your children and direct descendants. It restricts anyone outside of your blood line relatives – including spouses, in-laws or extended family members – from laying claim to the assets within the trust.
Contact us to discuss your personal situation and Estate Planning solutions.
Redchip acted for the shareholders of Automation IT (AIT) in the disposal of shares to ASX-listed company, Saunders International Limited.
AIT is a customer-focused control systems engineering company that works on real-time software development for a diverse range of hardware platforms. Automation IT was acquired by publicly listed engineering and construction company, Saunders International Limited, in June 2023.
Saunders International Limited acquired Automation IT by taking ownership of 100% of shares. Redchip worked in conjunction with the Buyer and its representatives in relation to reporting requirements and disclosure obligations as a publicly listed company.
Our team:
- Reviewed and advised on the share sale agreement for the transaction;
- Facilitated negotiations between the parties as to the execution of the agreement;
- Advised on securities relating to assets owned by the Company and on assets that were in transit from suppliers, and the necessary releases required to hand-over assets at Completion;
- Considered and resolved a range of financial issues that impacted the terms of the share sale agreement including working capital mechanisms and components and lockbox arrangements;
- Strategised with our client regarding the steps required to obtain change of control consents from a large number of customers and suppliers; and
- Prepared and advised in relation to various property aspects related to the transaction.
Our experienced M&A team drove the smooth execution of this transaction, that completed on time with an excellent commercial outcome for AIT. A lawyer involved in the matter said:
“This transaction presented a number of variables that required us to consider a range of issues to reach a satisfactory commercial outcome for both the Buyer and the Seller. Despite these variables, we were able to complete the transaction and provide a fantastic outcome to our clients.”
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In devising an Estate Plan for a client, we look at their full situation – from family, to wealth, to their commercial interests.
In this instance, a business owner needed to consider the succession of their business as a part of their Estate Plan. The client did not have a partner or children to care for, but wanted to look after certain business partners and allow them to acquire his shareholdings if he was to pass away.
In making these offers, the client didn’t want the business partners to have to pay for the shareholdings, essentially treating them as a gift from his deceased Estate. As the Client did not own the shares personally, this was not an offer that could be built into his Will.
Our solution was to prepare standalone Option Agreements which are triggered on the client’s death, allowing the business partners to acquire shares. Option Agreements are able to set the price at which the shares are to be sold, in this instance $0.
Good succession planning can often comprise more than just a Will, and putting commercial agreements in place as part of an Estate Plan can help to achieve a client’s wishes.
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Representing a buyer in the purchase, project leasing prior to sale and ultimate sale of a brand new commercial office building (fully leased).
Value: $26 million
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We assisted our client in the purchase of a heritage listed city office building, fully tenanted with access to shared laneway areas by prominent property fund.
Redchip Lawyers recently advised Silverstone Development on its acquisition of the heritage listed Corbett Chambers at 283 Elizabeth Street in Brisbane’s CBD.
The deal is another example of the commercial property market in Brisbane continuing to be a prominent area for investors looking to secure promising returns on their investment. It is a core element of Redchip Lawyers’ Property team to be an advisor to investors who seeking to grow their portfolio by acquiring commercial land holdings around Queensland.
The deal follows on from Silverstone’s recent acquisition of another commercial property located in Newstead, which Redchip Lawyers also advised on.
Redchip Lawyers property Director, Rob Lalor commented:
“This acquisition demonstrates the sustained growth of the Brisbane commercial property market and delivers on Silverstone’s continued expansion in the market. Redchip has been pleased to advise Silverstone on this transaction and previous transactions as it continue to grow its portfolio of land throughout the state.“
Redchip advised on all aspects of the acquisition, including the drafting and negotiation of the Contract and legal due diligence to ensure a smooth settlement for Silverstone. The transaction was led by Director Rob Lalor and was supported primarily by Associate Directors Rhennen Ford and Lauren Cutuli.
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Assisting the buyer in the purchase of an IGA Retail Centre at 77 Racecourse Road, Ascot.
Value: $9.75 million
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Representing the vendor in the sale of a large industrial site in Queensland with 22 leased buildings.
Value: $36 million
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Representing the vendor in the sale of 18 strata lots, combination of both commercial and retail, to a single owner.
Value: $32 million
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Advised vendor in sale of a digital media and internet information services company comprising a portfolio of 33 niche dating sites, to competitor Dating Group, the world’s largest global dating company.
Value: $51 million
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Advised purchasers in acquisition of Super Butcher from MDH Pty Ltd. Super Butcher is a warehouse retail butcher, with multiple stores across Queensland.
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Advised vendor in sale of a market leader in psychometric assessment development and game-based assessments for recruitment to Los Angeles-based Criteria Corp, a SaaS-based employment analytics platform, backed by Sumeru Equity Partners.
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Representing buyer in the purchase of 21 separately titled strata lots from 21 separate owners, settling simultaneously.
Value: $34.8 million
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When a Singapore-based international trading company sought support with a complex equity transaction, it turned to Redchip in preference to a large national firm.
The company wanted a team sitting in its corner looking at the deal from a commercial standpoint, as much as a legal one. The due diligence required in this particular matter covered both the entity the trade company was looking to fund, as well as the mining asset that entity was looking to acquire. Numerous stakeholders were party to the transaction, making it one of the most complicated Redchip’s commercial team had undertaken.
There was a vast amount of work to be undertaken in terms of environmental liabilities, workers compensation, insurances, native title, land and tenements, asset registers, financial accounting and much more. Additionally, a review of the purchase of the mining asset included pitfalls, issues, preconditions, and contracts of the asset’s major customers.
It was, however, the commercial strategies and dedication to the outcome that set the Redchip approach apart from that of more traditional legal counsel.
“We knew the due diligence that was required for this type of transaction; however, the sheer scale and number of parties involved made this a first for us,” commented the trading company’s CEO.
“Redchip went beyond the brief to deliver both legal and commercial strategies, devise protections, and support us throughout the negotiations. They were in our corner the entire time.”
The transaction was successfully concluded after a little over nine months, and the Redchip team continues to share a close relationship with the client.
“The team at Redchip really put some rod in our spines and pushed us to get the world from this deal. They helped us negotiate for what we wanted, based on their experience of similar commercial deals. It’s almost like dealing with mates now. They are on our side, they use the language we use, and it’s like they’re part of the team not just legal consultants.”
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The case of Matton Developments Pty Ltd v CGU Insurance Limited concerned whether CGU was required to indemnify Matton Developments under an insurance policy for extensive damage caused to a crane following its collapse on a work site in February 2008.
The issue at hand was whether the crane collapse was an accident, with the experienced crane operator taking a deliberate risk.
The case attracted national attention after the Supreme Court of Queensland initially found against Matton, and again when the Queensland Court of Appeal overturned that decision, requiring CGU Insurance to indemnify Matton Developments under its insurance policy. The successful appeal for Redchip’s client brought wider implications regarding conduct that may be deemed as “accidental, sudden and unforeseen” under an insurance policy.
Redchip Director, Robert Champney, worked closely with Mark Kenward, a Director of Matton Developments, and his family throughout the years of court action. He was the first lawyer to head to one of Mark’s building sites to see for himself a crane in action and better understand the practical workings of the equipment, a crane site and, in turn, build a full picture of Matton Developments and CGU’s case.
Mark explained: “I have had to learn more about the law in the last ten years than I ever wanted to know, and Robert was key to explaining it to us. He took the time to fully understand our business and the circumstances under which cranes on our projects operate, which was key to understanding our case in this litigation. Robert listened to what we had to say, and then broke his advice down into easily relatable pieces rather than throwing legal jargon at us”.
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Advised vendor in restructure and sale of business plus associated real estate assets. Mixed asset and share sale with significant pre-transaction restructure to overcome legacy structuring issues, together with earn-out which was paid in full.
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Advised owner of a commercial explosives business in mining services industry, in the sale of business and associated real estate assets to Hanwha Corporation.
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Driving business
momentum.
At Redchip, people often tell us that we don’t seem like lawyers. We make a point to have real conversations with our clients in everyday language. Because at our core, we know that success is built on relationships.