The Sale of a Founder-Led Fashion Company: Reconciling Creative Vision and Buyer Value

Founder-led fashion company sales provide a rich backdrop for examining the intersection between M&A, employment, and IP principles in law. This program explores how these standards are applied and best adapted to address the core conflict between a designer’s creative vision and a buyer’s financial priorities, ultimately achieving an outcome that satisfies both parties.

Participants will learn to master the key agreements that govern a founder’s post-sale compensation, creative authority, and exit terms, starting from the employment contract to the IP transfer. The seminar will also discuss how the “Alignment Gap” between the founder’s vision and the buyer’s objectives directly impacts enterprise value, and how lawyers can use their advisory role to build a more durable and valuable partnership.

This course is essential for any M&A, corporate, IP, and employment attorneys involved in the sale or acquisition of companies led by creative professionals, whether on the side of the founding designer or the prospective buyer.

Learning Objectives:

1. Describe the ethical conflicts and appropriate conduct for a company’s lawyer under ABA Model Rules 1.7 and 1.13 when the interests of the company founder and the company itself diverge in a sale transaction.
2. Analyze how a founder’s employment agreement operates together with the purchase agreement to enforce the “Stay or Forfeit” structure in creative founder-led company sales, focusing on "For Cause" and "Good Reason" clauses.
3. Explain the legal and practical restrictions facing a designer upon the sale of his eponymous brand and identify key negotiation points for limitations and carve-outs from the perspective of both the designer and the buyer.
4. Assess the "Alignment Gap" between creative founders and buyers and describe a lawyer's practical and ethical role, as outlined in ABA Model Rule 2.1, in identifying non-legal issues to foster a successful post-acquisition partnership.