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№ 174 Case Study — Mergers & Acquisitions

Three Signatures Needed to Fix Domains Nobody Remembered Registering

With four days left before the buyer's deadline to sign, a Rockland manufacturer's sale stalled on domain names that had never belonged to the company at all, and fixing it needed three people to agree.

Mergers & Acquisitions8 min readRockland, OntarioTrademark portfolio gaps
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ClientSarah, founder selling her second manufacturing business, this one built in Rockland over twelve years
The issueThe company's core domain names were registered to the founder personally, not the business being sold
ServiceCoordinating a three-way transfer of the domain and trademark assets before the buyer's signing deadline
ResolutionThe gap was closed and the sale signed on schedule, with the trademark portfolio genuinely clean at closing

The situation

Four days. That was what the buyer's counsel had given in writing: resolve the open item on the intellectual property schedule or the signing date, already pushed once, would not hold a second time. Sarah had been through a sale before, an earlier manufacturing business she had built and sold in her thirties, and knew that a buyer's patience on a deadline is not infinite, especially once financing commitments on their side start carrying their own expiry dates.

This second company, a Rockland manufacturer she had grown over twelve years into a business worth somewhere between fifty and eighty million dollars, was different in one specific way from the first. Its brand had been built around a set of product lines co-developed early on with Beth, Sarah's long-time business partner and a roughly twenty percent shareholder, and around a licensing arrangement with Marc-Andre, who owned a construction company and had, years earlier, agreed to use a related mark on a line of building products in exchange for a modest royalty and cross-promotion between the two businesses.

The buyer's diligence team, reviewing the company's intellectual property in the weeks before signing, had found that the domain names carrying the company's brand, the ones customers actually typed into a browser to find the business, were not registered to the company at all. They were registered to Sarah personally, under an account she had opened before the company even existed, back when she was testing the brand name as an idea. Nobody had ever moved the registration into the company's name as the business grew, and nobody had noticed, because the domains had simply kept working the entire time.

The buyer's counsel flagged it plainly: a company being sold for this price needed to actually own the digital front door customers used to find it, not rent it indefinitely from its own founder's personal account. Fixing it, on paper, sounded simple. In practice, it touched three different people with three different stakes in the outcome, and none of them fully agreed on how it should be done.

Sarah's own experience from her first sale made the situation more frustrating rather than less. That earlier deal had closed without a single intellectual property complication, and she had assumed, wrongly, that the systems she built the second time around, systems that had grown organically over twelve years rather than being designed deliberately from the start, would hold up to the same scrutiny. They had not, and she now had four days to find out how deep the gap actually went before she could find out how to close it.

What the review found

Our review of the company's full intellectual property position, done in the first day of the four available, found the domain issue was not isolated. The primary trademark registration for the company's main brand was properly held by the company itself, filed years earlier when Sarah first incorporated the business. But two related marks, used specifically on the product line co-developed with Beth, had been filed only informally, referenced in old marketing materials and product packaging but never formally registered by anyone. And the licence arrangement with Marc-Andre, allowing use of a related mark on his construction company's building products, existed only as an email exchange from years earlier confirming the royalty rate, with no written agreement addressing what would happen to that licence if the company was ever sold.

Three gaps, three different interests attached to each one. The domain names were Sarah's personally to transfer, but doing so quickly meant she needed to act before the deadline regardless of anything else, and she wanted assurance the transfer would not somehow expose her personally to future liability tied to the brand once she no longer owned the company. Beth, whose input had shaped the two informally used marks, had a legitimate interest in making sure her contribution was not simply folded into the sale without acknowledgment, and had not been closely involved in the sale process up to that point, which left her feeling like decisions about assets she had helped create were being made without her.

Marc-Andre's position was the most delicate. His construction company's use of the mark under the old licence arrangement predated any formal paperwork, and a buyer taking over the business could, in theory, decide not to honour an informal understanding at all. Marc-Andre's interest was continuity: he wanted his licence to survive the sale on roughly the terms he already had. The buyer's interest, reasonably, was clarity: they did not want to inherit an undocumented, open-ended arrangement with a third party they had never dealt with, on a mark that was supposed to be part of what they were buying outright.

None of the three, Sarah, Beth, and Marc-Andre, wanted the deal to collapse over this. But each had a different idea of what a fair resolution looked like, and the buyer's deadline meant there was no room for a slow, sequential conversation with each of them in turn. The buyer's own counsel added a further constraint: they wanted every gap resolved through documents they could actually review and approve, not verbal assurances from Sarah that everyone involved was on board, which meant each of the three fixes needed real paperwork, not just goodwill, inside a four-day window.

What we did

  1. Mapped every asset and every stakeholder against the deadline in one document. We built a single one-page summary showing each of the three gaps, who held rights to it, and what needed to happen to each one before signing, so all three parties and the buyer's counsel were working from the same facts rather than piecing the picture together separately.
  2. Prepared the domain transfer first, since it was the simplest fix. Sarah's personal registration required only her own signature to move, so we prepared and executed the transfer of the domains into the company's name on day one. Closing the most urgent and most straightforward gap immediately, before touching the harder two-party and three-party problems, gave the rest of the four-day window room to work and showed the buyer's counsel visible progress from the very first day.
  3. Brought Beth into the process directly rather than through Sarah. We arranged a direct call between Beth and our team, separate from Sarah, so Beth could raise her concerns about the informally used marks without routing everything through her business partner. That single step, talking to Beth rather than about her, resolved most of the tension; her actual request turned out to be formal acknowledgment of her contribution in the assignment documents, not a change to the deal's economics.
  4. Formalized the two informal marks through an assignment and consent. We prepared a short assignment agreement under which Beth confirmed the company's right to the two marks going forward, in exchange for written acknowledgment of her role in developing them. This satisfied her actual concern, recognition rather than money, without reopening the purchase price or her shareholding, and gave the buyer a clean, signed document instead of an informal understanding to rely on.
  5. Converted Marc-Andre's informal licence into a written agreement mid-negotiation. We drafted a licence agreement reflecting the terms Marc-Andre had operated under for years, gave the buyer's team a defined document to review instead of an email thread, and negotiated a short assignment clause confirming the licence would survive the change in ownership on its existing terms. This protected Marc-Andre's continuity while giving the buyer exactly the clarity its counsel had asked for.
  6. Ran all three workstreams in parallel, not sequentially. With four days total, we could not resolve the domain, the marks, and the licence one after another without running out of time before the deadline. We worked all three simultaneously, with daily check-ins across all parties, so no single conversation became the bottleneck holding up the other two, and each fix moved forward on its own track at the same time.
  7. Delivered a clean intellectual property schedule to the buyer a full day ahead of the deadline. Closing the gap with a day to spare, rather than right at the wire, gave the buyer's counsel time to review the fixes properly instead of accepting them under time pressure, which mattered to how seriously they treated the resolution and reduced the odds of a last-minute objection derailing signing.
  8. Confirmed each fix in writing with the buyer before signing. Rather than assume the buyer's counsel was satisfied once documents were sent, we asked for written confirmation on each of the three items separately. This meant there was no ambiguity going into signing about whether every open item had actually been closed to the buyer's own standard, rather than merely closed to ours.

The outcome

The agreement signed on the original deadline, with a trademark and domain portfolio that was, for the first time in the company's history, actually held cleanly by the company itself. The buyer's counsel confirmed in writing that the intellectual property item was resolved to their satisfaction, and the broader transaction proceeded without the deadline pressure spreading into other parts of the deal.

Sarah's personal exposure question was addressed directly in the transfer documents, with confirmation that moving the domains into the company's name did not create any ongoing personal obligation once the sale closed. Beth received the formal acknowledgment she had wanted, at no cost to the deal's economics, and reported afterward that the direct conversation, rather than the outcome itself, was what mattered most to her. Marc-Andre's construction company kept its licence on essentially the same terms it had operated under informally for years, now in a document that would survive the change of ownership rather than depending on the goodwill of whoever bought the business next.

The sale closed on schedule, at the full agreed price, with no reduction tied to the intellectual property issue once it was resolved. Sarah's reflection afterward was straightforward: the domains had cost nothing to register correctly twelve years earlier, and cost four stressful days and three careful conversations to fix under deadline. She has since made a habit, in the businesses she now advises informally, of asking a single question early: who actually owns the domain name. Beth and Sarah's working relationship, tested briefly by the sale's pressure, came out of the process closer than before, in part because the direct conversation about the informal marks was the first time in years the two of them had spoken plainly about who had actually built what inside the company they had run together.

What you can learn from this

  • Domain names and informally used trademarks are easy to overlook because they keep working whether or not the ownership is technically correct. Confirm who actually holds every brand asset, in writing, long before a sale is anywhere near the table.
  • When a deal involves three or more parties with different, only partly aligned stakes, resolve each person's actual underlying concern directly rather than assuming a single negotiation or a single document can speak for everyone at once.
  • An informal licence or contribution, even one that has run smoothly for years on a handshake or an old email, becomes a real diligence risk the moment the underlying business changes hands and a new owner has to rely on it.
  • A buyer's signing deadline is real pressure, but it can also focus a resolution that might otherwise drift for weeks. Use a tight deadline to get parallel problems solved together, in parallel workstreams, rather than one after another.
  • Acknowledging a collaborator's contribution formally, in writing, often resolves more underlying tension in a deal than any change to price or terms would, because the real request is frequently recognition rather than money.
This case study is entirely fictional. It does not describe any real client, file, or matter handled by Treadstone Law, and it is not a real file with details changed. All names, people, properties, businesses, dollar amounts, dates, and events are invented, and any resemblance to a real person, business, or situation is coincidental. Fictional scenarios like this one illustrate the kinds of legal issues people in Ontario commonly face and how a lawyer can help. They are general information, not legal advice — no two matters unfold the same way, and nothing here predicts the outcome of any real case. Reading a case study does not create a lawyer-client relationship. If you are facing something similar, speak with a lawyer about your specific circumstances.

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