Need idea on how to protect Intel when approaching possible business partner...

[legal_man]

Need help disclose confidential information regarding a property without getting ripped off...

1. Company A approach company B with Intel on commercial exploitation of a specific property that is for sale. Company A have no assets to buy the property, but company B has. Company A wants a Finders Fee for the property (50% of the price) and then buy the property in a 50%/50% Tenants-in-common with B to run a Joint-Venture with B for commercial exploitation.

2. If A tell B what property is refereed to before any deal is signed, B will buy the property without signing a deal with A. B would see the Intel as free information.

3. A therefore need some kind of legal protection before disclosing the identity of the property. He can make B sign an NDA, where the confidential information (the ID of the property) is defined in an external PDF connected with the NDA. In this way A could sue for damages if B buys the property and profit from it without A later on.

4. But if B breach the NDA, A must prove B have breached. If B use a friend to buy the property to circumvent the NDA, it might be legally very difficult for A to prove a breach.

5. A can sign a Joint-Venture with B, where Bs contribution would be the property, and the activity of the Joint-Venture would be to transfer ownership of the property to a 50/50 setup, or something similar. But this still doesn't give A protection from B buying the property himself, as I have heard that A cannot force B legally into buying a property he doesn't know the ID of or haven't seen himself.

6. One idea could be: If A first sign a deal with B, where B (IF and only IF B decide to buy the property after disclosure), ARE FORCED to pay a Finders Fee to A which equals 50% of the property price, and then ARE FORCED to sell 50% of the property to A. A ARE FORCED to buy his share.

Would this be possible legally?

Question; Are there any kind of legal setup (maybe like in scenario 6 above) that will work in a court of law, that will make it impossible for B to "steal" the Intel, the ID of the property and buy himself (or his friend) without major breach of an agreement and hard legal consequences? The legal setup must result in a 50%/50% tenants-in-common ownership setup.

Would be most grateful for help.

 

[quincy]

Need help disclose confidential information regarding a property without getting ripped off...

1. Company A approach company B with Intel on commercial exploitation of a specific property that is for sale. Company A have no assets to buy the property, but company B has. Company A wants a Finders Fee for the property (50% of the price) and then buy the property in a 50%/50% Tenants-in-common with B to run a Joint-Venture with B for commercial exploitation.

2. If A tell B what property is refereed to before any deal is signed, B will buy the property without signing a deal with A. B would see the Intel as free information.

3. A therefore need some kind of legal protection before disclosing the identity of the property. He can make B sign an NDA, where the confidential information (the ID of the property) is defined in an external PDF connected with the NDA. In this way A could sue for damages if B buys the property and profit from it without A later on.

4. But if B breach the NDA, A must prove B have breached. If B use a friend to buy the property to circumvent the NDA, it might be legally very difficult for A to prove a breach.

5. A can sign a Joint-Venture with B, where Bs contribution would be the property, and the activity of the Joint-Venture would be to transfer ownership of the property to a 50/50 setup, or something similar. But this still doesn't give A protection from B buying the property himself, as I have heard that A cannot force B legally into buying a property he doesn't know the ID of or haven't seen himself.

6. One idea could be: If A first sign a deal with B, where B (IF and only IF B decide to buy the property after disclosure), ARE FORCED to pay a Finders Fee to A which equals 50% of the property price, and then ARE FORCED to sell 50% of the property to A. A ARE FORCED to buy his share.

Would this be possible legally?

Question; Are there any kind of legal setup (maybe like in scenario 6 above) that will work in a court of law, that will make it impossible for B to "steal" the Intel, the ID of the property and buy himself (or his friend) without major breach of an agreement and hard legal consequences? The legal setup must result in a 50%/50% tenants-in-common ownership setup.

Would be most grateful for help.

What is the name of your state?

I do not see, by the way, that an agreement of the sort A envisions has any benefit to B.

 

[legal_man]

clarifications...

B will benefit as they can conduct commercial activity together by using the property. To be able to conduct some of this commercial activity, B will need A as B does not have the knowledge needed. But if B CAN buy the property himself, he will do it and then approach A for a separate deal where he uses A's skills. A will be forced to comply as he wants to profit, but he will profit less not being part owner of the property.

It is for the province of Nova Scotia in Canada, but I think an idea will work all over America. I can check the idea for Nova Scotia later on.

Do you have an idea? thank you

 

[tranquility]

If this is anything but a pie in the sky dream, you are talking of a complex business and legal arraignment requiring multiple talks and advisors just to sell the concept, let alone the specifics. There is not going to be a document that fixes all the issues.

 

[legal_man]

Yes I understand it is complicated. I just would like to know if there is "A path" legally to walk, or if it is a "Mexican stand-of" so to speak. What do you think about the following idea:

Before any discussion about buying a property (as there are other aspects of the collaboration also), Company A and B sign a Joint-Venture. In the contribution section to this Joint-Venture it is defined that IF it is decided (1 voice each) that a property should be bought in order to be able to conduct the activity of the Joint-venture, then this property should be paid by B but setup in a tenants-in-common ownership with A. If there are clauses in the Joint-Venture agreement that regulates competitive activity by the owners, and the property is needed in order to fulfill the activity of the Joint-venture, would this be enforceable?

Of course B could tell a friend to buy the property, but as he in the agreement is prohibited from disclosing info and work in a competitive way, he would breach the agreement. Or? Also, as the property is needed in order to fall through with the activity of the Joint-Venture, then the Joint-Venture need to deal with the new friend owner. They could of course tell they don't know each other and the burden of proof that they do is on me, but wouldn't that be a big risk to take?

What do you think? Is it possible to construct such Joint-Venture agreements that are legal?

 

[Zigner]

It is for the province of Nova Scotia in Canada, but I think an idea will work all over America. I can check the idea for Nova Scotia later on.

Do you have an idea? thank you

This forum is for US law only. Any answers you get would be based on US law and not Canadian law. You need a Canadian law forum.

 

[legal_man]

Yes I know but this is global issues I think. I will check the law in Canada. I only need a basic idea to move forward.

 

[quincy]

Yes I know but this is global issues I think. I will check the law in Canada. I only need a basic idea to move forward.

There are very few "global" answers when it comes to legal questions. You should sit down with an attorney in Canada and work out the various and assorted issues involved with your plan. Good luck.

 

[tranquility]

Yes I understand it is complicated. I just would like to know if there is "A path" legally to walk, or if it is a "Mexican stand-of" so to speak. What do you think about the following idea:

Before any discussion about buying a property (as there are other aspects of the collaboration also), Company A and B sign a Joint-Venture. In the contribution section to this Joint-Venture it is defined that IF it is decided (1 voice each) that a property should be bought in order to be able to conduct the activity of the Joint-venture, then this property should be paid by B but setup in a tenants-in-common ownership with A. If there are clauses in the Joint-Venture agreement that regulates competitive activity by the owners, and the property is needed in order to fulfill the activity of the Joint-venture, would this be enforceable?

Of course B could tell a friend to buy the property, but as he in the agreement is prohibited from disclosing info and work in a competitive way, he would breach the agreement. Or? Also, as the property is needed in order to fall through with the activity of the Joint-Venture, then the Joint-Venture need to deal with the new friend owner. They could of course tell they don't know each other and the burden of proof that they do is on me, but wouldn't that be a big risk to take?

What do you think? Is it possible to construct such Joint-Venture agreements that are legal?

Legal, yes. Meaningful? Who knows? Since there would be no need to disclose the specific property until late in the negotiations, there really isn't a need for protection until after the joint venture is greatly described. By then, you would be so in bed together, no one will really want to unwind all that work when there can be a mutually profitable venture. Then a simple non-disclosure/non-compete prepared and reviewed by both parties attorneys will be enough.

But, you're not going to get anyone in discussions and go through the cost of reviewing any document as you describe without a ton of work first.