While secondary sales of minority interests (as opposed to change of control transactions) are rare, a trust service generally offers the safest form of recourse. If the seller is a special purpose vehicle of a private equity fund or similar financial investor, a more frequent recourse mechanic (although still subject to negotiations) is a form of final contractual guarantee from a solvent party (such as the fund itself). This can take the form of a letter of guarantee, a declaration of authorization or even a letter of capital obligation. The solvent company may also become a direct party to the sales contract and directly assume any obligation to pay compensation. Most private companies (and often the large shareholders who support them) are cautious with new investors suddenly appearing in their heading chart. . . .
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