Giovanni (recently deceased) and Tal were joint owners of a sportswear company. They have a buy-sell agreement and corporately owned life insurance policy which you sold to them. Tal asks you to review the major terms of the buy-sell agreement with him in advance of his meeting with Maria, Giovanni’s widow. Which of the following statements correctly describes the terms of the buy-sell agreement.
a) Tal has no choice and is obligated to purchase the shares from Maria.
b) Tal and Maria along with counsel will negotiate a satisfactory price.
c) Maria, as new owner, can sell her portion to anyone she chooses.
d) The insurance proceeds will be tax free to the company and all proceeds received by Maria will be taxable.