Entrepreneurial Small Business 2nd Edition by Jerome Katz , Richard Green

Exercise 12

THE D'ARCY ROTHSCHILD BOOKING AGENCY, LLC
D'Arcy Rothschild ran a highly successful entertainment booking service in Ann Arbor, MI, specializing in small classical music acts such as string quartets and vocal and instrumental soloists. He booked these performers into university towns and suburban communities surrounding big cities. In his 40 years in business for himself, he created a solid following among the managers of venues in those locales, as well as among artists and their teachers, who often referred fresh talent to D'Arcy.
To say D'Arcy created the solid following is a bit of a misnomer, because in the eyes and ears of the world the D'Arcy Rothschild Booking Agency, LLC was two people: D'Arcy and his manager, Peg Lipton. For more than 30 years, Peg had been literally across the desk from D'Arcy. She started as his secretary straight out of college, but learned the business and earned D'Arcy's trust in her judgment until he promoted her to manager and gave her a salary to match. In a two-person office, she still did some typing (other work was handled by a part-time secretary working from her PC at home), but when customers or prospective clients called, Peg was as likely as D'Arcy to handle the entire process.
At the age of 67, D'Arcy suffered a massive heart attack and died, leaving his wife Beatrice with the business and his life insurance policy payout of $1,000,000 (four years of D'Arcy's income). The business had always been the only source of income for the family, and Beatrice was determined to protect her financial legacy, especially now that her beloved husband had passed away. So she was taken by surprise when Peg suggested she consider selling. Peg, who was 52, had wanted to be a partner, but D'Arcy preferred owning the entire business himself. He did however promote her, treat her with the respect due a manager, and, more importantly, paid her an excellent salary, with an annual bonus based on her sales (her annual income hovered around $100,000). In terms of knowledge and finances, she was ready to own the business.
Peg waited a week after D'Arcy's funeral to raise the issue in a personal visit to Beatrice. Beatrice was shocked by the idea, even though Peg was offering $250,000 up front, with annual payouts of $35,000 a year to be paid for as long as Beatrice lived. Even if Beatrice lived to be 80 (she was 62 now), the total amount Peg promised would be roughly the equivalent of three and a half years of D'Arcy's annual income from the business. It just was not acceptable, and that is what Beatrice told Peg. Peg asked if there was an amount that would be acceptable, and Beatrice said she was expecting the business to continue the returns D'Arcy made.
Legally, is there any reason why Beatrice must sell to Peg