Deal StructureLegal
Intermediate Entity Structure
Also known as: Holdco note structure, entity-level note, consolidated note structure
When seller notes are routed through a company the founder doesn't control rather than held directly by each seller, stripping individual enforcement rights and consolidating leverage in whoever controls the entity.
WHY IT MATTERS
In the Crossfield deal, $15M in seller notes were held by Crossfield Holdings — the entity — not by the individual founders. James controlled the entity; Dan did not. That meant Dan had the right to receive money but no independent right to demand payment, file a claim, or take legal action. This is common in PE deals where the buyer insists on a single counterparty for administrative convenience. The cost falls entirely on co-sellers who lose standing. Barrett Law Group recommended separate instruments with independent enforcement rights. Whitfield & Associates rejected the change. By the time the founders understood the implications, the deal had closed and the leverage had shifted.