I received a phone call from an attorney whom I have
routinely worked with. She asked if I would talk to
one of her clients about selling a business. There was a
catch, the owner had died earlier in the year, so I would
be dealing with a Trustee. The company had a key
employee (plant manager) who was helping the Trustee
and CPA run it. The company had about $225,000 in
EBITDA and was going strong.
Before saying yes, I told the a�orney I needed to do
some research and get back to her. I reached out to
brokers at Murphy Business Sales and posed the
question, “Can you sell a business if the owner has
died?” I laid out the few details I had from the a�orney
and waited.
I initially thought my chances of finding another
broker who had experience selling a business with
a deceased owner were slim, akin to finding a buyer
for a niche flower shop. However, several brokers
surprised me by sharing their experiences with similar
situations. They had successfully closed deals where
the owner had passed away and a trustee or family
member was involved.
Key factors they highlighted included maintaining
clean financial records, securing access to key
employees and CPAs, and demonstrating the business’s
strong performance. They also cautioned that
certain challenges might arise, such as the inability
to provide representations and warranties or offer
seller financing. Additionally, the involvement of a key
employee could potentially complicate the deal.
Armed with information, I agreed to speak to the
Trustee about the business. It was a contract screen
printing and embroidery business and had been in
business for 38 years (it was founded by the deceased
owner’s father). The owner’s family was not involved
in the business. The Trustee had spoken to and been in
negotiations with a few buyers who approached him
once the owner passed away. The plant manager also
submi�ed an offer. All the offers received had been
lowball offers hoping to capitalize on the death of the
owner. The company continued to operate at a profit,
and the plant manager wanted to stay on (even though
her offer to buy the company was turned down).
I outlined my approach to the Trustee, emphasizing
the importance of beginning with a business valuation.
He requested I contact the CPA to gather financial
details. A�er presenting the valuation, the Trustee
and CPA were pleasantly surprised. My estimation
exceeded their previous offers. Despite this, the Trustee
was still hesitant to list the business with me.
A month later, the Trustee contacted me again,
expressing interest in listing the business. However,
he presented a lengthy list of terms and conditions
that would restrict my ability to effectively market
the business. I explained that I could only assist him
if I were granted the freedom to work through the
selling process. One of my essential conditions was
unrestricted access to the CPA. She, in collaboration
with the Plant Manager and Bookkeeper/HR
Manager, would be crucial to providing the necessary
information for a successful sale, as they possess
in-depth knowledge of the business. Unfortunately,
the Trustee insisted on controlling all aspects of the
process, and I was compelled to decline the listing.