Skud fra hoften: Shoot out-klausuler i joint venture-kontrakter

Abstract

This master thesis examines how companies involved in a research & development joint venture can use shoot-out clauses to resolve deadlocks and create a fair valuation and distribution of unmarketable assets in the case of partnership dissolution. When companies in the biotechnical and pharmaceutical industries wants to develop new knowledge and technology, they form partnerships with other companies, as the hub of innovation is in interorganizational collaboration. As companies still wants to reduce risk and protect itself against opportunism, this paper shows how the creation of an equity joint venture is a preferable choice when creating a R&D partnership with intangible and unmarketable assets where know-how is the primary initial contribution to the cooperation. Albeit the joint venture structure can benefit the partners and help create and maintain relational rent, all good things must come to an end and that is also the case in most joint ventures. In these partnerships the call for an end can be due to relational inertia or consumption of the partner’s know-how. When termination is imminent, the partners risk a prolonged divorce as the nature of the assets can make it difficult to dissolve in a way, where both parties feel that the settlement was fairly distributed. When a partnership is terminated, it is usually straightforward for partners to allocate the assets as the assets also have a value on the market. In R&D joint ventures, the primary assets are characterized by high idiosyncrasy which leads to problems with valuation when the dissolution commences before a marketable product is created. With the application of strategic contracting, the purpose of this paper is to analyse how shoot out clauses can help strengthening the generation of relation rent between the partner companies while at the same time benefit the valuation of unmarketable assets as know-how ex ante. The master thesis’ problem statement is answered with the use of the business law method which is a bilateral discipline between legal dogmatics and economical science. As the paper wants to qualify the legal contracting tools with regards to economic theory regarding the behaviour of economical agents and the generation of relational rent in partnerships, this approach is found viable. The master thesis concludes that the use of shoot-out clauses can positively affect the dissolution process and remedy the deadlock, although the specifications of a given partnership will affect which type of shoot-out clause is most beneficial.