Could a contract clause spoil your retirement plan

October 21, 2005

My younger associate, whom I assumed would succeed me, told me that he intends to resign. He says our buy-sell agreement obligates me to purchase his shares. I plan to retire next year, and this will upset my plans. What should I do?

Q: My younger associate, whom I assumed would succeed me, told me that he intends to resign. He says our buy-sell agreement obligates me to purchase his shares. I plan to retire next year, and this will upset my plans. What should I do?

A: Consult a healthcare attorney. He will lay out your options, depending on the terms of your agreement. Hopefully, your contract has a provision that allows both of you to liquidate the practice, rather than requiring one to buy the other out. That may be the best solution.

If you find you're stuck purchasing your partner's shares, there's not much you can do. Start looking for a buyer for the practice right now, if you plan to retire next year. Possibly your local hospital can help you find one.