Deal Structure
The Dual-Hat Trap
Also known as: Enforcement conflict, employee-enforcer paradox, structural conflict of interest
TO-original framework. When the only person who can enforce the seller's rights is employed by the buyer, enforcement is structurally impossible. The conflict isn't personal — it's architectural.
WHY IT MATTERS
Introduced in D.15 (The Dual-Hat Trap). When the remaining founder wears two hats — employee of the buyer and enforcer of the seller's rights — those roles are irreconcilable. One hat pays his salary. The other requires him to sue his employer. In the Crossfield deal, James was the only person with standing to enforce the $15M in seller notes because they were structured through CFH. Enforcement meant sending a formal demand to Ridgeline — his employer. His for-cause definition included 'conduct detrimental to the company's interests.' A legal demand for payment could be characterized as exactly that. The structure designed the outcome. Nobody had to cheat.