Arbitration & Mediation

Closed Dutch Auctions from Mediator Ralph Williams, III

By Victoria Pynchon

Ralph Williams August 2009 ADR Tip

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When 50-50 partners break up, the Closed Dutch Auction is an effective way to set the buyout price. The partners exchange sealed bids stating the price at which they will sell their 50% share. The highest bidding partner "wins" and buys out the "loser" at the "loser's" price.

The price set by each partner must be realistic, because if he "loses", the partner will have to sell at the price he set. Setting too low a price has a double adverse effect; the "losing" partner will be the seller at the lower price.

Ralph O. Williams III
ADR: 310.201.0010

Full post as published by Settle It Now Negotiation Blog on August 12, 2009 (boomark / email).