The trustees who bid together but never agreed how to talk

The situation

The plan, as Omar explained it early on, was straightforward. The employee ownership trust he chaired had been formed to buy out the founder of a Mississauga industrial supply company where most of the trust's members had worked for years, and the trust's three trustees had agreed at the outset that Omar, as chair, would be the one to speak directly with the seller during negotiations. Wilson, a construction project manager who sat on the trust's board, and Raymond, a pharmacist who had joined as the third trustee for his financial background, would stay in the background, reviewing terms and voting on major decisions but leaving the day-to-day conversation to Omar.

For months this worked exactly as intended. Omar met with the seller, reported back to Wilson and Raymond after each session, and the trust moved steadily toward a deal in the $30 million to $50 million range, financed through a combination of vendor take-back financing and a bank facility the trust had lined up. The structure was common enough for an employee ownership trust of this size, and nothing about the early negotiations had raised concerns among the three trustees.

The trouble began after a meeting in the final stretch of negotiations, when the seller's lawyer sent a follow-up letter confirming what the seller understood to be agreed: a set of post-closing employment guarantees for existing staff that went further than anything the trustees had discussed as a group. Omar insisted he had made clear those terms were subject to the other trustees' approval. The seller's letter suggested otherwise, describing the commitment as final.

Wilson and Raymond, seeing the letter for the first time, were alarmed for two separate reasons. Wilson objected to the substance of the commitment, arguing the guarantees went beyond what the trust could responsibly fund. Raymond was more concerned with the governance question underneath it: if Omar could bind the trust to terms the other two had never voted on, the entire arrangement of having a single designated spokesperson was unworkable, and the bid itself was now at risk of falling apart from the inside before the seller ever had to decide anything.

The dispute surfaced at a particularly bad moment. The seller had a competing offer in hand, not as strong on price but faster to close, and had told Omar plainly that any sign of disorganization among the trust's leadership would tip the decision toward the other buyer. A trust that could not agree internally on what its own representative had said was not a reassuring picture for a seller weighing which offer to trust with a business the seller had spent decades building. Omar now had two problems running on the same short clock: resolve the internal dispute, and do it without the seller noticing that anything was wrong.

The legal question

The dispute was not really about what had been said in the room. Everyone agreed roughly on the topics discussed. It was about authority: whether Omar, as the trust's designated spokesperson, had actual or apparent authority to bind the trust to employment terms the other trustees had not formally approved, and if he did not, whether the seller could still hold the trust to what its own lawyer's letter described as an agreed term.

Under the trust's governing documents, major commitments required approval by all three trustees, and Omar had none for the specific guarantees the seller's letter described. That answered the internal question but not the external one. From the seller's perspective, Omar had been presented throughout the negotiation as the trust's authorized voice, and nothing in prior correspondence had told the seller that any particular category of term required separate sign-off. Apparent authority could still matter here, but only within limits a trust does not share with a corporation. A seller dealing with a company can generally take an officer's signature at face value; a seller dealing with a trust is expected to satisfy itself that the person across the table actually has the power to bind it, because trustees are ordinarily required to act together and their power to delegate is fixed by the trust's own governing document, not by how confidently a spokesperson conducts himself in a meeting. If Omar's authority to bind the trust on this specific term was never there, the seller's stronger avenue might not be against the trust at all, but against Omar personally for what he represented himself as able to do.

This is where the joint bid structure created a risk the trustees had not anticipated when they agreed on their roles. A single point of contact makes negotiations efficient and prevents a seller from being told different things by different people, but it also concentrates enormous practical power in one person's account of what happened in meetings nobody else attended. Without a clear, contemporaneous record of what had actually been proposed and by whom, the trust had no reliable way to establish where the line between negotiation and commitment had actually been drawn.

The stakes went beyond this one disputed term. If the seller could reasonably treat Omar's word as final, every future exchange in the negotiation carried the same risk, and Wilson and Raymond would effectively be bound by conversations they had no part in and no way to verify after the fact. Resolving the immediate dispute required settling this larger question, not just the specific employment guarantees at issue.

There was also a practical complication specific to a trust structure. Unlike a corporation's board, which typically has settled rules about quorum and delegated authority that courts have interpreted many times over, the trust's governing document had been drafted for a different purpose and said comparatively little about how negotiating authority could be delegated to one trustee acting on behalf of the group. That gap made it harder to point to a clean rule and easier for a good-faith disagreement between the trustees to spiral into something neither Wilson nor Raymond wanted, a dispute over the deal becoming a dispute over the trust's own governance at the worst possible time.

What we did

1. Reviewed the trust's governing documents line by line to confirm precisely what authority had been delegated to Omar as spokesperson and what still required unanimous trustee approval, establishing from the outset that the employment guarantees fell outside what Omar could commit to on his own regardless of what the seller believed or how the earlier conversations had been characterized by either side after the fact.
2. Requested the seller's complete correspondence file rather than relying on either side's recollection, since a written record made months earlier under no pressure was far more reliable than any account produced after a dispute had already started, and asking for the full file rather than a summary meant nothing could be selectively left out on either side. The seller's lawyer initially offered only the disputed follow-up letter, and it took a second, more specific request before the earlier correspondence was released in full.
3. Found the seller's internal meeting notes, an ordinary set of handwritten minutes the seller's own assistant had taken during the disputed session, which nobody involved in the dispute had thought to ask for and which recorded Omar explicitly flagging the employment terms as tentative and subject to board approval, a detail that mattered far more once the dispute arose than it had seemed to anyone writing it down in the moment.
4. Presented the notes to both sides as neutral evidence rather than argument, which shifted the conversation away from who was remembering correctly and toward what the actual next step should be, defusing much of the personal tension between the trustees in the process, since evidence neither side had produced carried a credibility that either trustee's own account could not have matched on its own.
5. Drafted a revised communication protocol for the remainder of the negotiation requiring any term outside routine deal mechanics to be confirmed in writing by all three trustees before Omar could represent it to the seller as agreed, closing the gap that had caused the dispute in the first place and giving all three trustees a shared reference point for every conversation the negotiation still had left to run.
6. Negotiated a narrower employment guarantee with the seller directly, scaling the commitment back to a defined transition period at a level Wilson had confirmed the trust could responsibly finance, rather than the open-ended promise the seller's letter had originally described, while still giving the seller meaningful assurance for existing staff going forward, which the seller ultimately accepted as reasonable given the documented context the notes had provided.
7. Facilitated a formal trustee resolution ratifying the revised terms and the new communication protocol together, with all three trustees signing the same document, so the trust's internal governance and the external deal terms were resolved in the same step rather than leaving one unsettled while the other closed, and so no future dispute could reopen the question of what had actually been approved.
8. Briefed the seller's counsel on the resolution in general terms once it was finalized, without disclosing the internal disagreement in detail or naming which trustee had raised which concern, so the seller could see the trust moving forward with a unified position rather than picking up on the friction that had briefly threatened to slow the deal down at the worst possible moment in the negotiation.

The outcome

The acquisition closed within the trust's original budget, with the employment guarantee scaled back from what the seller's letter had originally described to a version limited to a defined transition period rather than an open-ended commitment. The seller accepted the narrower term once the meeting notes made clear that the broader commitment had never actually been agreed to by the party who alone could bind the trust, and the deal moved forward without the seller treating the earlier dispute as bad faith on the trust's part.

Internally, the compromise cost something too. Wilson had wanted the employment guarantee removed entirely, and Raymond had pushed for a broader restructuring of how negotiations were conducted going forward, including a preference for two trustees attending every seller meeting. Neither got everything they wanted; the trust settled on the single-spokesperson model with the added written-confirmation requirement, a middle position none of the three trustees considered ideal but all three could accept.

The trust completed the purchase and the transition guarantee was honoured through its defined period without incident. What lingered longer than the deal terms was the lesson about how the trustees worked together: a designated spokesperson had proven efficient for months and then nearly cost the trust the deal in a single disputed meeting, and the written protocol adopted afterward became a standing part of how the trust conducted every negotiation that followed.

The seller, who never learned the details of the internal dispute, later told Omar that the trust's steady, well-organized conduct through the final weeks of negotiation had been part of what made the difference between the two competing offers. The version of events the seller saw was a buyer group that stayed consistent and professional under time pressure, which was true, even though it had taken a tense two weeks of internal negotiation among the trustees to get there.

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