If a stock redemption is to be carried out, a cross-purchase type of buy and sell agreement cannot be involved.

Question

Quizplus · Accepted Answer

A cross-purchase type of buy and sell agreement involves the purchase and sale of stock between the shareholders themselves, rather than between the corporation and the shareholders. In a stock redemption, the corporation redeems its own stock from the shareholders, so a cross-purchase agreement cannot be involved.

If a Stock Redemption Is to Be Carried Out, a Cross-Purchase