A reopened sale where the bank, not the buyer, held the pen

The situation

Ildiko and Mohamud had known each other for years before any of this started. He had worked alongside her in the industry for over a decade, first as a junior hire and eventually as someone she trusted to run parts of the business without her looking over his shoulder. When she decided to sell the company she had built in Cornwall, he was the first person she called, not a broker, not a stranger who had answered a listing. His partner, Halima, brought the financial half of the plan: they would buy together, with Halima managing the books and Mohamud running operations, backed by a loan from a commercial lender to cover most of the purchase price.

The first time around, Ildiko and Mohamud had tried to do the deal themselves, on the strength of trust rather than paperwork, dressed up in a short lawyer-drafted purchase agreement. It was not enough. The closing happened, money changed hands, but within months disputes surfaced over what exactly had been sold, what liabilities came with it, and what Ildiko was still owed on an earnout the two of them had sketched out informally rather than documented properly. The relationship soured enough that the parties agreed to unwind parts of the transaction rather than litigate it, which left all three of them poorer and warier than when they started.

By the time Mohamud and Halima came to us, the business was back in Ildiko's name in substance, the working relationship with her was strained but not broken, and everyone involved wanted to try again, properly this time. The transaction value sat somewhere in the mid single-digit millions, funded again largely through a loan Mohamud and Halima would take out against the business's assets, since neither of them had the personal capital to fund a purchase of this size outright.

What none of the three of them had focused on the first time was the lender's role. A secured lender financing a business purchase does not just hand over money and step back. It attaches conditions, and for a buyer relying on that money to close, those conditions can end up controlling far more of the deal than the purchase agreement itself does. Mohamud and Halima, in particular, had assumed the first time that once their bank had pre-approved them in principle, the rest was paperwork. That assumption had been part of what went wrong, and it was the first thing we asked about when the three of them sat down with us to try again, this time with Mohamud and Halima as our clients and determined not to repeat it.

Everyone came into the second meeting more cautious than the first, which was, in its own way, useful. Ildiko wanted written commitments this time, not verbal reassurances. Mohamud and Halima understood that a second failed sale would likely end the relationship for good, and they came to us wanting a structure that protected them, specifically, if the financing process went sideways again, not just a verbal assurance from their own lender that things would probably work out.

Why this was harder than it looked

On paper, a redo should have been simpler than the original deal. The business, the buyers, and the price were all known quantities, and everyone involved already understood the company's operations far better than a stranger buyer would have. In practice, the second attempt was harder, for two reasons that fed into each other and that took longer to untangle than any of the three parties expected going in.

The first was trust. Ildiko had already been burned once by an informal process, and Mohamud and Halima had already been through a messy unwind that cost all three of them money and goodwill they could not easily get back. Every draft term got read with more suspicion than a first-time deal would have attracted, and drafting sessions ran long as each side asked for clarification on language that, in a normal transaction, would have passed without comment. We spent real time rebuilding the agreement so each side's obligations were explicit rather than assumed, because assumption, more than any single clause, is exactly what had failed before.

The second, and the one that turned out to matter more for our clients specifically, was the lender. Mohamud and Halima's financing came with a business plan requirement: their lender wanted to see, and approve, how the business would be run post-purchase before releasing funds, including staffing plans, projected cash flow, and how Ildiko's departure from day-to-day operations would be handled. That is normal lending practice, but it is rarely written into the purchase agreement as a closing condition in its own right. Most purchase agreements are drafted around the buyer's and seller's promises to each other, with financing treated as the buyer's problem to solve quietly in the background, on the assumption that once a buyer says financing is arranged, it is arranged.

When we reviewed the loan commitment letter and the lender's internal approval process, it became clear that assumption was not going to work here. The lender's sign-off on the business plan was not a formality; it was a substantive gate that could stall or kill the deal at the last minute, after Mohamud and Halima had already committed to a closing date. If that approval came late, or came back with conditions attached, our clients could be left contractually bound to close, or in breach, on financing that was not actually in place, exposed to a forfeited deposit or a claim from Ildiko for a failure that was really their lender's, not theirs. That was almost exactly the shape of the disaster the first attempt had turned into, just landing on the other side of the table this time.

That gap between what the purchase agreement said and what the lender actually controlled was the real risk in this second attempt, and it is easy to miss precisely because it sits outside the four corners of the sale document, buried instead in a commitment letter that, left unaddressed, would have left our clients on the hook to close a deal their own lender had not cleared.

What we did

1. Reviewed Mohamud and Halima's loan commitment letter in full, line by line, rather than treating financing as a background detail to be sorted out separately from the purchase agreement, because a commitment letter's conditions do not automatically become enforceable closing conditions in a sale, they only protect a buyer if they are deliberately built into the purchase agreement itself, in writing, before signing.
2. Identified the lender's business plan approval as an unstated closing condition and flagged it to Mohamud and Halima in plain terms, since neither of them had framed it that way before, and a condition nobody names is a condition nobody protects against; once it was named, both understood it as the kind of thing that had quietly helped derail the first attempt as well.
3. Built the lender's approval into the purchase agreement as an express condition precedent in our clients' favour, with a defined deadline, so that Mohamud and Halima could walk away from the deal and recover their deposit if financing was not actually secured, rather than being contractually bound to close, or exposed to a breach claim, on financing that remained only promised.
4. Negotiated a longer diligence and financing window than Ildiko's side first proposed, giving the lender realistic time to complete its own review, because the original timeline had been set around the parties' hopes for a quick second closing rather than the lender's actual internal process, and a rushed timeline was exactly the kind of pressure that had pushed the first deal into informality.
5. Drafted explicit representations describing exactly what was, and was not, included in the sale, addressing the ambiguity that had caused the first deal to unravel, so that inventory, contracts, and outstanding obligations were itemized line by line for Mohamud and Halima's benefit, rather than left to an informal understanding between people who had known each other a long time.
6. Set up a direct communication protocol with the lender's own counsel so that any conditions attached to the approval reached our office, and Mohamud and Halima, the moment they were known, instead of arriving secondhand or late, which closed off the exact channel through which a last-minute surprise could otherwise have reached our clients too close to closing to react properly.
7. Advised Mohamud and Halima to hold the closing open until written, unconditional lender approval was actually in hand, resisting their own instinct, and some pressure from Ildiko's side, to move faster on an informal assurance that approval was 'basically done,' precisely the kind of assumption that had derailed the first sale, and one our clients could not afford to repeat with their own capital and their relationship with Ildiko on the line.

The outcome

The lender's approval came through roughly six weeks after the purchase agreement was signed, with two minor conditions attached relating to ongoing insurance coverage on the business's equipment. Because that approval was a defined closing condition rather than a background assumption, those conditions were addressed and satisfied before closing, not discovered after money had already moved and Mohamud and Halima had already taken over operations with financing still uncertain. Had the same conditions surfaced under the structure the first deal used, there would have been no mechanism protecting our clients from being bound to close, or blamed for a failure that was really their lender's.

Mohamud and Halima did not sign anything obligating them to close, take over day-to-day operations, or release their deposit until the lender's approval was final and unconditional. That sequencing is what prevented a repeat of the first sale's core problem: a gap between what people believed was agreed and what was actually locked in writing. The transaction closed on the extended timeline, roughly two months later than the parties had originally hoped, but on terms all three understood in the same way, with no ambiguity left over from the negotiation for a future dispute to grow out of.

This was a prevention outcome rather than a dramatic recovery, which is easy to undersell in hindsight. Nothing went wrong at closing because the thing that could have gone wrong, our clients being locked into a deal their own lender might not approve, had already been named, timed, and built into the agreement months earlier, while there was still time to plan around it. Ildiko, Mohamud, and Halima closed the deal on workable terms, and the strained relationship between them survived the second attempt intact, with Mohamud and Halima taking over a business they were finally certain they could afford, and Ildiko able to step back knowing the sale would not unravel behind her again.

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