Header - S#07 / Exit Event Dispute · Owner - Lukas · Date - 2025-09-07 · Version - v1 · Pass-Fail - Pending

Problem statement - An exit is signed, but there is a live dispute over what the SPV is entitled to receive due to price adjustments, earn-outs, escrows, side deals, consideration mix, or timing. Street needs documents and a workflow that lock the economics, expose leakage, and resolve disputes fast.

Legal vulnerabilities

• Sale-of-Company definition too narrow so value leaks via asset, IP, licensing, or affiliate deals outside the waterfall.
• No-leakage covenant absent so founder side payments reduce “price.”
• Drag-along without fairness or process gates forces unfair terms.
• Escrow or indemnity oversized with vague release tests enables slow-pay.
• Earn-out KPIs subjective or buyer-controlled with no neutral expert path.
• Stock-for-stock consideration without collars or walk-aways allows exchange-ratio games.
• No stockholder-rep mechanics increases execution friction and missed elections.
• Waterfall schedule not attached and working-capital adjustments uncapped or ambiguous.
• Information rights weak so SPV cannot review banker books, comp, or side letters.

Regulatory risks

• Misrepresentation optics if token allocations occur while exit economics are disputed or undisclosed.
• Securities drift if language implies entitlement to a fixed share of company value; safer to pause than distribute mid-dispute.
• Venue halts if public messaging is inconsistent with actual consideration mechanics.

Market precedents

• Failures - Earn-outs and working-capital adjustments are frequent litigation targets and oversized escrows become slow-pay levers.
• Survivals - Broad sale definitions with aggregation, no-leakage, fairness or process protections, collars on stock consideration, expert determination for KPI or accounting disputes, and cap-snapshot covenants minimize post-signing games.

Proposed mitigations