What is Russian Roulette Clause and how does it work
the situation between Fedez e Luis Sal for podcast control Wild Moss it got pretty hot. At the center of everything is this famous one Russian roulette clause. It sounds a bit like a James Bond movie, but it's all true and very real in the business world.
How the Russian Roulette Clause works
This clause is simple but ingenious: if two partners cannot agree, one can make an offer to buy the other's shares. The other partner can accept the money and leave or refuse and buy the other one's money himself forced to sell them.
The Russian Roulette Clause comes into play in stalemate situations between partners, typically in companies with 50% shared ownership. It works in a rather clever way: when one partner proposes to buy the other's shares at a price determined by himself, the second partner is faced with a critical decision. You can accept the offer and sell his shares, or refuse the offer but, in this case, is obliged to buy the first shareholder's shares at the proposed price and the other is obliged to sell them.
This dynamic ensures offers are thoughtful and serious, since every member must be ready to suffer the consequences of his proposal. In practice, this clause prevents speculative maneuvers and guarantees a certain degree of fairness in negotiations, forcing members to carefully evaluate their moves.
Why is the Russian roulette clause fair and beneficial?
This rule is made to be fair: It makes you think carefully before bidding, because you may find yourself having to pay for what you offered. It's a way to keep everyone in line and make sure the offers are made in earnest.
Why did Fedez lose?
Fedez tried to play this card at the end of 2023 when he proposed to Luis to buy his shares, but when Luis said “no thanks”, the court said Fedez had to stick to the rules he had agreed to. Basically, he lost because the rules of the game were clear from the start.
Should Fedez sell its shares?
After the court's decision, it seems that Fedez will have to pass his shares to Luis. But in legal battles, never say never. Fedez could still find a way to turn the situation around.
Is Luis obligated to buy?
Luis, for now, has the upper hand and the right to take Fedez shares. But here too, the road is long and full of possible surprises. Luis won a hand, but the game is still open.