Business & Strategic
“Sometimes divorce is better than marriage.” Sumner Redstone
Sure as death and taxes, relationships between business owners frequently sour over the course of time. In the case of family-owned and other closely held businesses, longstanding personal dynamics magnify already challenging situations. These matters often materialize themselves in management disfunction, declining profitability, deadlock and oppression by controlling stakeholders of minority interest holders.
Professional partnerships are equally affected by the relationship issues which affect unregulated, closely-held businesses generally.
There is a wide body of law, which varies greatly depending upon the type of business entity and state of organization, upon which these business relationships are addressed and adjudicated, both practically and in the context of litigation. There are fundamental strategies which controlling owners utilize to enrich themselves at the expense of other owners, whether through self-dealing, diverting business opportunities, excessive compensation, related party transactions and waste of business assets. Equally, there are critical duties of loyalty and care, as well as statutory rights, which minority interest owners can leverage to correct these inequitable actions. Overlaying state law, complicating factors frequently include the many personal guarantees which business owners sign with lenders, landlords and trading partners that must be unwound as part of a business separation.
We have represented the interests of operating companies, controlling owners and minority interest owners in this context, defending and prosecuting oppression, appraisal and dissenter’s rights actions and recapitalizing businesses to redeem owners when relationships have deteriorated to the point that such is necessary.