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ARTICLE · 01 MAY 2019

How secure is your legal relationship?

Pointon Partners
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Article highlights benefits of having a legal relationship document setting out parameters, framework & other issues.

AustraliaCorporate/Commercial Law
Simon Della Marta
Simon Della Marta
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In any business arrangement it is important to ensure the legal relationship between the various interests is carefully defined and documented.

In the Hollywood blockbuster movie, The Social Network, the undefined relationship between co­ founders Mark Zuckerberg and Edwardo Saverin led to litigation which fortunately for the parties involved led to a undisclosed settlement. Mr Saverin initially had ownership of 24% of the Facebook company which was subsequently diluted to below 10% after a change in the position between the two co-founders. With an implied value of Facebook in October 2007 of around US$15 billion a 14% interest represented US$2.1 billion, certainly enough money to dispute about.

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