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Commentary

114.4 Russian roulette

BUSINESSES vol 4(2) start-up, sale and purchase
| Commentary

114.4 Russian roulette

| Commentary

114.4 Russian roulette

Over the last few years, it has been increasingly common to find a so-called ‘Russian roulette’ clause in the deadlock provisions of a private limited company shareholders’ agreement. As the name suggests, this is a much more drastic solution to the problem as it will inevitably lead to the departure of one of the shareholders from the company.

The procedure typically works as follows. Shareholder A initiates the procedure by serving a written notice on shareholder B offering to buy B’s shares in the company at a specified price. B has a limited time (often 28 days) either

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