Share Sale Advisory | The Client Who Requested Share Sale Advisory to Recover an Investment

Company A, which pursued the sale of shares, was a financial investor (FI) that held 100% of the shares of a mid-sized manufacturer, and it had set a target of recovering its investment within five years from the time of the initial investment.

As market conditions stabilized, Company A began the share sale process to recover its investment, and through individual negotiations with a strategic investor (SI), it concluded a memorandum of understanding (MOU).

It then moved the sale negotiations into full swing, but in the course of the transaction, numerous issues arose regarding the scope of the seller's legal liability, the conditions for closing the transaction, the insurance structure, and the like.

Accordingly, Company A was in a situation where it urgently needed the strategic assistance of legal experts across the entire process, from review of the transaction structure to the conclusion and closing procedures.

It therefore sought out a corporate attorney and requested advice in order to ensure the stability of the transaction and to guard against legal risk.

Without the approval of the board of directors, a director may not engage in the same type of business or become a director or an unlimited liability partner of a competing company.

In a share sale accompanied by a transfer of management control, it is important to clearly include the relevant clause in the contract in order to prevent any possibility of a violation of the non-compete obligation after the resignation of the existing management.

If the representations and warranties stipulated in the share purchase agreement are false or are not performed, the buyer may claim damages.

If the scope of the representations and warranties clause, the requirements for liability upon breach, the liability period, and the like are not clearly prescribed in the contract, the seller may be exposed to unexpected risk of damages liability after the fact.

The corporate attorney designed a transaction structure that reduced subsequent legal liability in line with A’s objective of recovering its investment, and proposed a method of dispersing liability through the purchase of W&I insurance.

Through this, a structure was established in which the seller could feel at ease even after the closing of the transaction.

From the MOU conclusion through the share purchase agreement (SPA) negotiation stage, the attorney comprehensively reviewed clauses that were disadvantageous from the seller's position (the scope of damages, the warranty period, and the like) and proposed directions for revision.

At the same time, the attorney carried out a negotiation strategy to reach a smooth agreement while coordinating with the buyer's requirements.

For the issues raised during the buyer's due diligence, the attorney conducted a legal review in advance, organized the explanatory materials, and supported the response to them.

The attorney also checked whether the various requirements demanded at the time of closing had been fulfilled and provided practical advice, managing the matter so that the entire schedule could be completed without setbacks.

A stock sale goes beyond a simple transfer of shares; it is a highly complex transaction in which the negotiation structure with the buyer and the management of legal risk operate together.

In particular, from the seller's perspective, contract design that blocks subsequent disputes and the use of insurance become the core of the transaction.

Based on the experience and know-how accumulated in the field of M&A and investment recovery, this firm provides strategic responses even for complex stock sale structures.

Rather than working alone, we form a task force and provide comprehensive support across all stages of a stock sale.

If you need legal assistance regarding a stock sale, we invite you to develop a strategy together with the Daeryun, Korea's 9th-largest law firm (based on 2025 value-added tax filings with the National Tax Service), 🔗corporate attorneys.