Occidental Petroleum Corporation
Author: Andrew Humphries & Linda McComie, PartnerLink
Exit is often the most difficult topic for partners to address. At the outset in a joint enterprise there will be enthusiasm and euphoria. But the objective of the venture to generate clear benefits for all concerned throughout its life should always remain centre-stage. Therefore, at the earliest point, even before the deal is sealed, it is essential to think jointly, openly and honestly about potential exit scenarios. During the life of the enterprise partners may come and go and finally the relationship will be dissolved. It is vital that value continues to be captured and exploited to the full, and thus damaging litigation is avoided. Although it may seem perverse, maintaining a constant management focus on Exit Planning is an essential component of joint enterprise success. Accordingly, an Exit Plan should be jointly developed to prepare for further relationships beyond the duration of the current contract. There are many horror stories about messy divorces but few about the graceful termination of business relationships.
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