Accompanied an M&A deal in an international GameDev company
Accompanied the purchase of shares in an international game-dev company and resolved a protracted corporate dispute
Gist of the case
The client asked CPO Group to resolve a corporate dispute between the shareholders of the parent Cypriot company engaged in game development and game design. The shareholders in the company were two Russian citizens who owned 69% and 31% of the company's shares respectively.
There was a long-standing conflict between these shareholders over different views on profit distribution. The disagreement was so significant that it led to negative consequences for the business. But the parties to the conflict could not agree on the sale of shares to each other.
The work of our lawyers
Our lawyers proposed the following legal structure to resolve the existing corporate conflict based on the wishes of the parties:
In order to implement this legal construct, the lawyers of CPO Group have prepared the necessary package of documents:
The dividend transfer resolution was based on the principle of checks and balances. Its essence was that the CEO of the company acted as a third party to ensure that the seller and buyer of the shares fulfilled their contractual obligations.
- The Company distributes dividends, of which the amounts received by Shareholder 2 are counted by the parties as partial fulfillment of Shareholder 1's obligations to pay for the share purchase agreement.
- Part of the dividends received by Shareholder 1, the latter is obliged to transfer to Shareholder 2, as the remaining amount of the value of the shares under the share purchase agreement.
In order to implement this legal construct, the lawyers of CPO Group have prepared the necessary package of documents:
- Memorandum of understanding;
- SPA (Share purchase agreement) - share purchase agreement;
- Transfer Order;
- Dividend transfer resolution;
- Director's obligation to register the transaction only after receipt of money by the seller.
The dividend transfer resolution was based on the principle of checks and balances. Its essence was that the CEO of the company acted as a third party to ensure that the seller and buyer of the shares fulfilled their contractual obligations.
Legal result
It was important to take into account that one of the shareholders was located in the territory of the Republic of Kazakhstan, the other in the territory of the Republic of Armenia, and all corporate actions were carried out at the place of registration of the company - the Republic of Cyprus. These circumstances led to the fact that the groups' CPO had to exercise additional control over banking operations (to prevent violations of payment deadlines).
Despite all objective difficulties, our team carried out coordinated and active actions, which led to a result that maximally satisfied the interests of all parties.
Despite all objective difficulties, our team carried out coordinated and active actions, which led to a result that maximally satisfied the interests of all parties.
