Business Divorce Disputes

Monday, September 11, 2017

Family Law Post (Part II) - What's Love Got To Do With It: The Business, Financial and Other Benefits Of A Marital Pre-Nup


By Frances Ellenbogen and Ladd Hirsch

Couples often spend months planning their wedding day details, from the color of the flowers to the icing on the cake.  What they often overlook, however, are the legal rules that will govern their property once they are married.  While the topic lacks romance, couples should seriously consider the benefits of entering into a pre-nuptial agreement, which will impact them, and potentially their children, far beyond their wedding day.

This is the second in a two-part series focusing on pre-marital agreements, or pre-nups. Part 1 considered how a pre-nup can help a couple address a number of crucial financial and personal issues.


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Monday, August 21, 2017

Family Law Post (Part 1) - Love Is Forever, But A Pre-Nup May Be The Better Bet: The Financial And Other Benefits Of A Marital Pre-Nup

By Ladd Hirsch*

Not so long ago, marital pre-nups were viewed as devices solely for use by the rich and famous, who never seemed to stay married for long.  In today’s world, however, couples from all walks of life face a myriad of important financial and personal issues that a pre-nup can help them to address.  Pre-nups can benefit both spouses, including by:

  • Preventing costly, drawn out divorce litigation;
  • Protecting a spouse’s interests in a business;
  • Preserving valuable family assets, real property and heirlooms;
  • Assuring the inheritance rights of spouses and children;
  • Shielding one spouse or children from creditors; and
  • Giving peace of mind to the couple by reducing uncertainty about the impact of major life events in the future.

This is a two-part Post focusing on marital pre-nups.  Part 1 evaluates how a pre-nup can address important critical business and family issues for the couple.


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Tuesday, May 23, 2017

Shareholder Derivative Claims: The Sharp Arrow in the Quiver Still Available to Minority Shareholders In Texas Private Companies

By: Ladd Hirsch

Based on our personal experience handling Business Divorce matters for both majority owners and substantial minority investors in private companies, we have learned firsthand that there are two sides to every story and every Business Divorce matter is unique.


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Tuesday, March 28, 2017

Buy-Sell Agreements: Don’t Leave Home (Or Invest) in a Private Company Without One

By: Ladd Hirsch

The season finale of the hit reality TV show The Bachelor attracted more than 8 million viewers. My wife and teenage daughters help make up this devoted fan base, and watch every episode. Yet, when I question them about whether the subject of a pre-nup agreement has ever come up on the show, I get eye rolls, and comments like, “Dad, don’t be such a downer.”  Assuming that the Bachelor and his new fiancé do make it to the altar, however, the show also does not mention that


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Monday, February 27, 2017

What Is A Texas Partnership: The Answer To Come Soon In The Case Of ETP v. Enterprise Products Partners LP

By:  Ladd Hirsch

The legal tension is building.  Private Texas companies and their owners are awaiting a court decision that may force them to say “Howdy, Partner” to companies with whom they have no written partnership agreement. The case on which business eyes are focused is ETP v. Enterprise Products Partners, which is before the Dallas Court of Appeals after a jury awarded $535 million in early 2014.  The case has been described as a corporate form of common law marriage to a company that the jury determined was jilted in favor of another. This is the hottest partnership case the Lone Star State has seen in years.

The Disputed Partnership at the Heart of the Case

Energy Transfer Partners LP (“ETP”) alleges that it formed a statutory (unwritten) partnership with Enterprise Products Partners LP (“Enterprise”) to build a crude oil pipeline that would carry oil from Cushing, Oklahoma to the Gulf of Mexico. Enterprise contended that no partnership arose because the boards of the companies never signed a definitive agreement. ETP countered that the actions of the companies confirmed their intent to work as partners and that their conduct met the five-factor test for determining partnership in the Texas Business Organizations Code.



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Friday, February 10, 2017

Virtual Reality Goes To Court: Lessons Learned From The $500 Million Jury Verdict Against Facebook’s Oculus Division

By: Ladd Hirsch

The ink is barely dry on the half billion dollar verdict that a Dallas federal court jury returned last week for ZeniMax Media against Oculus, a virtual reality company that Facebook acquired in May 2014. Even before the federal court issues a final judgment and Oculus files an inevitable appeal, however, the case provides valuable lessons for business owners and investors.


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Monday, December 12, 2016

A Look Back at 2016 – Legal Issues Affecting Texas Private Company Owners and Investors (Part 1)

A sure sign the year is winding up is the release of A sure sign the year is winding up is the release of TIME magazine’s “Person of the Year” list.  If TIME created a similar list of legal developments impacting owners and investors in private Texas companies this past year, at least two issues would be on it: the adoption of the Defend Trade Secrets Act and the stalemate that continues to exist for minority shareholders who have claims for oppression against majority owners.  The legal restrictions on the oppression claim have spurred an increase in shareholder derivative lawsuits containing allegations that private company officers and directors breached their fiduciary duties to the business.


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Monday, November 21, 2016

The Devil You Know: Pick Business Partners Wisely and Plan For Problems Ahead

By: Ladd Hirsch (Dallas)

Picking the devil you know in selecting a business partner may seem like a good strategy.  But the list of celebrities who have suffered financially in their dealings with business partners is striking with losses totaling millions of dollars in some cases.  Uma Thurman lost $1 million. Sting lost $9.8 million. Billy Joel lost $90 million.  And celebrities are not the only ones who have suffered negative results because they, like so many people, picked poor business partners.  Fortunately, there are steps that anyone entering into a long-term relationship with a business partner can take to avoid the financial consequences of a disastrous partnership.


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Monday, November 14, 2016

Business Partner Exits (Part 2): Breaking Up is Hard to Do, Especially When Partners Do Not Adopt an Exit Strategy

By: Ladd Hirsch (Dallas)

The flight attendants on commercial flights notify passengers where the exits on the plane are located. Fortunately, the vast majority of air travelers never have to put this advice to use.  In private companies, however, business partners head for the exits far more frequently as over the past decade, less than half of startup businesses survived longer than five years, and just one-third lasted for more than ten years.


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Monday, October 31, 2016

Partnership Disputes: He is Heavy and Is Not My Brother; Paths for Partners to Avoid and Resolve Business Conflicts

By: Ladd Hirsch 

Most relationships involve conflict at some point, and business partnerships are not immune.  In fact, the intense pressure on businesses makes it more likely that business partners will have disagreements from time to time.  The key question therefore is not whether business partners will ever have conflicts, but whether they can take steps to ensure that the conflicts that inevitably arise between them can be promptly resolved in a way that does no lasting harm to the success of the business.

 This is the first in a two-part series regarding partnership disputes.  This Post focuses on how to resolve partnership conflicts, and steps business partners can take to provide a healthy means for resolving their conflicts.


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Wednesday, September 21, 2016

The Eye of the Beholder: Valuing a Private Company Ownership Interest

By: Charles Rubio and Ladd Hirsch

Unlike public company stock, which actively trades electronically on national exchanges at published prices, ownership interests in private companies, and minority interests in particular, are often not readily marketable.  As a result, determining the value of an ownership stake in a private business can be a thorny problem.  Business owners and investors who want to determine the value of their ownership interest typically need to retain an independent business valuation expert to conduct a valuation of the company from which they can then calculate the value of the ownership interest at issue. 


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With offices in Houston and Dallas Texas Business Divorce a division of Diamond McCarthy LLP assists clients throughout Texas including Austin, San Antonio, Midland, Fort Worth, Galveston, Amarillo, Abilene, and Waco.



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