Uncle Barney owns and is the key sales contact of an outdoor furniture business. His principal supplier is Bing Fabric Manufacturing Company, a publicly listed company in China. Barney and Bing have been in talks about some collaboration to ensure that Bing gets paid in a timely fashion and increased sales opportunities in Canada. Barney is interested in preferential pricing manufacturing.
Barney also plans on retiring in 5 years when his daughter graduates from medical school. Barney and Bing are at the cusp of an agreement where Barney would sell 49% of his company to Bing, whereupon he would be hired as Bing’s executive director of North American sales and marketing for 4 years, after which Bing will buyout Barney and he can retire. The parties have almost completed the due diligence for the purchase and are keen to proceed but have reached a bit of an impasse. Barney is obviously concerned about making sure that he will continue to have a job for the next 4 years (as those medical school bills are high). Being a public company in China, Bing’s owners insist that the choice of law and jurisdiction for all transactions have to be Chinese law. Also, because Bing is a public company, all disputes must be submitted to confidential arbitration in China.