This post uses hypothetical scenarios for illustrative purposes only. It does not describe any actual client, transaction, or representation, and is not legal advice.
Here is the Florida PE-rollover story founders almost never hear before signing the new stockholders agreement at closing. A middle-market Florida operating company sells 70 percent of its equity to a private equity sponsor. The founder rolls the remaining 30 percent into the new HoldCo, takes a board seat, and signs the stack of closing documents the buyer’s Delaware firm slid across the table three days before the wire. Buried in the amended and restated Florida articles of incorporation is a single-paragraph section titled “Corporate Opportunities.” It reads like boilerplate. It is not. It is the sponsor’s most valuable governance provision in the entire closing binder, and it was drafted for the sponsor’s benefit — not the founder’s.
That paragraph is a corporate-opportunity waiver adopted under § 607.0744 of the Florida Business Corporation Act. It disclaims, in advance, the target corporation’s interest in a defined universe of future business opportunities that come to specified persons or classes. In plain terms: it lets those persons — usually the sponsor, its funds, its portfolio companies, and its designated directors — pursue deals that would otherwise be locked up by the corporate-opportunity doctrine. The rolling founder who signs without negotiating the waiver is signing away a real ex-ante governance right in exchange for nothing. And in most rollover closings I have seen in the market, the founder does not know the section is negotiable at all.
What § 607.0744 actually authorizes
Florida adopted § 607.0744 as part of the 2019 comprehensive revision to Chapter 607, and the statute deliberately mirrors Delaware’s DGCL § 122(17). The text is short. A Florida corporation may, by a provision in its articles of incorporation or by a resolution of the board, renounce any interest or expectancy of the corporation in, or in being offered an opportunity to participate in, specified business opportunities or specified classes or categories of business opportunities that are presented to the corporation or one or more of its officers, directors, or shareholders.
Three features of the statute matter for the rollover analysis. First, the waiver may be granted at the entity level in the articles — meaning it survives changes in the board and does not require case-by-case ratification. Second, the waiver applies to “specified persons” or “specified classes,” so a well-drafted provision names exactly whose future deal flow is exempted. Third, the waiver is limited to “specified business opportunities” or “specified classes or categories” — a critical statutory qualifier that operates as a drafting constraint. A waiver of “any business opportunity of any kind” is arguably outside the statute’s authorization and would likely fail on judicial review.
The doctrinal backstop is the common-law corporate-opportunity doctrine, which imposes on directors and officers a fiduciary obligation to offer to the corporation any business opportunity that (1) the corporation is financially able to undertake, (2) is in the corporation’s line of business and of practical advantage to it, and (3) the corporation has an interest or expectancy in. Florida courts apply a version of the doctrine derived from Farber v. Servan Land Co., 662 F.2d 371 (5th Cir. 1981), and the elements track the Delaware Guth v. Loft analysis. Absent a § 607.0744 waiver, a director who takes a corporate opportunity for personal benefit is subject to a constructive trust and disgorgement remedy. With a properly drafted waiver, the same conduct is protected.
Why the sponsor drafts the waiver on day one
A private equity sponsor buying a Florida target does not want the corporate-opportunity doctrine to constrain its next investment. The sponsor’s fund likely holds four or five other portfolio companies, several of which may operate in adjacent industries. The sponsor’s operating partners sit on multiple boards. The sponsor’s deal team is actively sourcing new deals — some of which will look, at the diligence stage, exactly like a bolt-on the current target might have pursued. Without a waiver, every one of those opportunities creates litigation exposure the moment the sponsor’s designated directors on the target board learn about it. With the waiver, the sponsor’s parallel investment program continues undisturbed.
The Delaware bar has been drafting these provisions since 2000, when DGCL § 122(17) was enacted following the persuasive Chancery decision in Broz v. Cellular Information Systems, Inc., 673 A.2d 148 (Del. 1996), and cemented in later cases including the frequently cited unpublished framework from Cyberworks Services LLC v. Ridgefield Acquisition Corp. and the Chancery’s In re Ebix, Inc. Stockholder Litigation. Delaware precedent on § 122(17) is persuasive but not binding on a Florida court applying § 607.0744. The Florida statutory text tracks Delaware closely enough that I expect Florida courts to look to Chancery decisions for guidance — but that is a prediction, not a rule.
The four terms the rolling founder should negotiate
The waiver is negotiable. The sponsor’s draft is not the market. Rolling founders and their counsel who treat the corporate-opportunity provision as boilerplate lose four separately valuable rights at closing.
First, reciprocity. The sponsor’s standard draft names the sponsor, the sponsor’s funds, the sponsor’s portfolio companies, and the sponsor-designated directors as protected persons. It does not name the founder. In the average rollover closing, the founder is contractually restricted from outside investments by a noncompete in the stockholders agreement — and simultaneously has no reciprocal corporate-opportunity waiver protecting the outside investments the noncompete permits. A rolling founder who keeps a small angel portfolio, a passive board seat at an unrelated Florida company, or a family real estate holding company should be named as a specified person under the waiver. The founder’s outside activities need the same statutory protection the sponsor is giving itself. Asking for reciprocal treatment costs the sponsor nothing and is almost always granted when raised.
Second, carve-outs for the target’s core business. A well-drafted waiver excludes from its scope any opportunity that is directly in the target’s actual line of business as it exists at closing. If the target sells commercial HVAC installation and service in South Florida, the waiver should not permit the sponsor to acquire a competing commercial HVAC service business in Broward County and route it around the target. This is where the statutory phrase “specified business opportunities” does real drafting work. The sponsor’s draft usually waives “any opportunity in any industry.” The founder’s counter should tie the waiver to opportunities outside the target’s core business, defined by reference to the target’s NAICS code, geographic footprint at closing, or a schedule of protected verticals.
Third, scope limits to defined categories. This is the statutory anchor and the litigation hook. A waiver that lists three or four specific opportunity categories — for example, opportunities in medical device distribution, opportunities in fintech infrastructure, opportunities in consumer packaged goods — is more likely to be enforced as within § 607.0744’s authorization than a waiver that says “any and all opportunities of any nature.” The founder’s negotiating leverage here comes from the statute itself. A sponsor that resists a scope limit is asking the founder to sign an arguably unenforceable provision, and pointing that out reframes the negotiation. Well-drafted scope categories protect both parties.
Fourth, a sunset. The waiver should terminate on defined triggers — the sponsor’s exit from the target, the founder’s termination from the target, or a specified anniversary. Sponsors resist a sunset tied to exit because they want to protect their post-exit deal flow, but a founder-side sunset tied to the founder’s separation from the board is standard and reasonable. Without a sunset, a founder who exits the target three years after closing is left holding a permanent waiver that benefits a sponsor no longer contractually connected to the founder. The sunset should also address what happens on a sponsor-driven sale to a strategic — most drafts I have reviewed do not.
The interaction with the stockholders agreement noncompete
The corporate-opportunity waiver does not sit alone. Every rollover closing includes a stockholders agreement or shareholder agreement, and that document invariably includes a noncompete binding the rolling founder for two to five years after separation. The two provisions must be read together. A founder who accepts a broad noncompete and a non-reciprocal waiver has agreed to a one-way governance regime: the sponsor may pursue any deal in the founder’s industry, and the founder may pursue nothing. That combination is not market. It is a drafting overreach that survives only when nobody flags it at closing.
The clean fix is to align the two provisions. If the noncompete restricts the founder from “the business of the company,” then the waiver should exclude from its scope the same “business of the company.” If the noncompete carves out the founder’s pre-existing passive investments, the waiver should extend to those same investments. Symmetry is not just fairness — it is legally cleaner and easier to defend if the enforceability of either provision is later challenged. For a broader treatment of how the stockholders agreement fits into a rollover structure, see the internal walkthrough at founder commentary on a private equity stockholders agreement, and for the broader M&A framework the internal treatment at montague.law/business-law/m-a-mergers-and-acquisitions.
Where the doctrine sits in 2026
Florida practitioners increasingly see § 607.0744 waivers in every PE-backed target closing, and the sponsor-side drafting has become more aggressive over the last three years. What was a two-sentence provision in 2020 is now a page-long section with cross-referenced defined terms. The founder’s leverage to negotiate is highest at LOI stage — before the closing documents are drafted — and drops sharply once the amended articles are on the distribution list.
The statutory text is available through the Florida Senate’s official portal at § 607.0744, Fla. Stat., and the Delaware analog is DGCL § 122(17). A Florida court reviewing an aggressively drafted waiver would almost certainly look to Chancery’s treatment of § 122(17) — a persuasive-authority posture Florida corporate courts have taken on close statutory analogs.
The pattern that costs rolling founders real economic value in Florida PE closings is not the purchase price and not the earnout. It is the governance stack signed at closing without meaningful negotiation. The corporate-opportunity waiver is the quiet centerpiece of that stack. It is short. It is negotiable. And it is one of the small handful of provisions where the founder’s leverage at term sheet is completely disproportionate to the founder’s leverage the week of closing.
If you are a Florida founder about to sign a PE rollover and want to walk through how the corporate-opportunity waiver interacts with the rest of your closing binder, feel free to reach out to my firm manager, Magda, at Magda@montague.law, or fill out our contact form. Mention you read this post.
— John
