Business Divorce

A “business divorce” is often as contentious and volatile as a marital divorce, particularly when dealing with friends or family members.  Our firm represents partners, members and officers of closely-held and family-owned businesses who find themselves in the midst of disputes with their co-owners; discover fraud and/or questionable businesses practices; and/or realize that their company can no longer properly function under the current ownership/management structure.

Regardless of whether you are a majority or minority owner, it is important that in matters such as these you seek counsel with relevant experience, knowledge of the applicable law and commitment to your cause.  We have substantial experience in these types of matters, particularly in recent years when the economy has faltered and business partners began taking a closer look at their co-owners and their business practices, and scrutinizing their companies’ performances.  During these tough economic times, we have represented a number of both majority and minority owners of small businesses, and gained a strong understanding of the applicable law in this area and all of its hidden and somewhat complex nuances.

There is no “one-size-fits-all” solution for these disputes that, in our experience, are often complex matters involving sensitive personal, financial, tax and accounting issues.  We assist our clients in assembling the right team of accountants and associated professionals (when necessary), and navigate our team through whatever (private or public) legal processes may be required to achieve a satisfactory end result—whether that be through negotiated resolution, a “corporate divorce,” buyout of one shareholder or another, appointment of a custodian or provisional director or, in the most extreme case, dissolution of the business.

As always, consistent with our overall firm philosophy, we approach these matters in a strategic, results-oriented manner intended to efficiently resolve disputes in a business-like manner.

Representative Matters:

  • Represented a minority owner in a family-owned, $50+ million per year industrial services company, which was allegedly being mismanaged by the majority owners.  We achieved several in-court victories, including orders that installed our client with full operational and financial control of the company during the pendency of the litigation, and appointment of a custodian to manage the sale of the business on the open market, which resulted in a multi-million restrictive covenant agreement between our client and the company.
  • Represented a minority owner of numerous limited liability companies that owned and operated several restaurants and a franchise in Manhattan.  After filing suit, we were able to negotiate a favorable buyout on behalf of the minority owner.
  • Represented the founder and majority owner of a closely-held insurance brokerage firm following a “midnight departure” of his minority partners whom allegedly misappropriated confidential client information and funding.  After several expedited and favorable court rulings, including the entry of a preliminary injunction enjoining the minority partners from contacting, communicating with or soliciting clients, the matter was amicably resolved.
  • Represented a minority owner of a closely-held engineering firm against majority owners whom were alleged to be attempting a “squeeze out” of the minority owner (and his family members).  Successfully mediated a buyout of the minority owner’s interests and assisted in the formation of a new, competing company.
  • Represented majority owner of closely-held engineering firm with tens of millions of dollars in revenues against minority shareholder alleging oppression.  Successfully negotiated buyout of minority shareholder’s interests and achieved dismissal of litigation.

 

 

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