The period before a business sale, distribution or major investment maturity is an opportunity to put cash requirements and decision rights on firmer ground.
Separate headline value from available cash
Expected proceeds can differ materially from net distributable funds after expenses, taxes, escrows, retained consideration and timing conditions.
Map the first 24 months
Create a calendar of known obligations: taxes, debt maturities, capital calls, operating commitments and planned large expenditures. Add downside scenarios rather than relying solely on the base case.
Define the function of each reserve
Operational cash, contingency funds and strategic deployment capital should not be treated as interchangeable. Each has a different liquidity horizon and tolerance for risk.
Coordinate decisions across advisers
Investment, legal and tax professionals should operate from the same transaction timetable. Small misalignments in sequence can create avoidable costs or constraints.
Keep flexibility in the plan
Liquidity is valuable because it preserves optionality. Preserve the capacity to respond when actual proceeds, timing or market conditions differ from expectations.
This article is for general information and discussion only. It is not investment, legal or tax advice, or an offer to buy or sell a security. Obtain advice from appropriately qualified professionals for specific circumstances.