Joint Venture Undergoes Business Dissolution In California
On behalf of The Law Office of Lynnette Ariathurai, A Professional Corporation posted in Sales & Dissolutions on Wednesday, July 10, 2013.
As the saying goes, two heads are better than one. In business this could be translated as two companies are better than one company. This is why many companies end up working together on joint ventures in order to bring a new product or service to the market, while capitalizing on each company's unique expertise, influence or market advantages. This is what one California company had aimed to do when it teamed up with an overseas company in order to bring new food products to the marketplace. Unfortunately, the two companies were ultimately unable to see eye-to-eye on a variety of key issues, which resulted in a business dissolution.
The two companies had agreed to join forces in 2010 with the goal of using microalgae to develop new food ingredients. The California company, Solazyme, specializes in renewable bioproducts and oil products. The other company Roquette Freres S.A. creates starch-based products. Each company maintained half ownership of the joint business venture under the agreement between the two parties.
The deal began to go sour when the two companies could not come to an agreement on a time line for bringing the products to market as well as the marketing strategy. Upon release of the news of the dissolution Solazyme's stock shares began to plummet by over 19 percent. As of the latest reports, the company's stock share value had dropped to $10.18. Solazyme says it is planning to speed up the time line to bring the products to the marketplace.
It is expected to take several weeks for the official business dissolution of the joint venture to be finalized between the California company and the overseas partner company. However, in order for the dissolution to be completed there will be some legal paperwork which must be filed with the proper regulating authorities. This procedure must be done correctly in order to avoid any future legal disputes.
Source: MSN Money, "Solazyme and Roquette dissolve joint venture," June 24, 2013