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...
Category: Business Divorce Disputes
The Eye of the Beholder: Valuing a Private Company Ownership Interest
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...
FAMILY LAW POST: Co-Owning a Business After Divorce? Your Ex-Spouse May Still Love You more than the IRS (When It Comes to Paying Taxes)
Conventional wisdom is not always so wise. In the case of divorce, conventional wisdom holds that the divorcing couple must divide all of their assets at the time of divorce. When the couple owns a business together, however, splitting up their business in the divorce proceeding often leads to intense disputes over the...
Texas Supreme Court’s Recent Decision Helps Business Owners Keep the Wraps on Company Trade Secrets During Litigation
One of the NFL’s most legendary football coaches, Vince Lombardi, is known for fiery speeches extolling his players that “Winning isn’t everything, it’s the only thing.” Yet, when triumph on the battlefield is so costly it actually destroys the “winner,” it is known as a...
Swimming with the Sharks (Part 2): Don’t Become Chum in the Water After Receiving a PE Investment
Part 1 of this series focused on how private company owners can make their businesses attractive to private equity (PE) investors like those on the hit TV show “Shark Tank.” The discussion picks up after the PE firm has made its investment and the Post considers what steps private company owners can...
Swimming with the Sharks (Part 1): Attracting Private Equity Investment in Your Business
For years, use of the term shark in a business context referred to unsavory characters such as shady lenders, sketchy lawyers and unscrupulous business people. More recently, the success of the hit reality TV show “Shark Tank,” has given sharks a Hollywood make-over, and a more positive image. The Shark Tank...
FAMILY LAW POST: You Can’t Always Get What You Want, But You Can (Likely) Get What You Need — From the Family Law Court
During a marital divorce, a couple can work cooperatively to divide the assets in their marital estate, including the interests they own in private businesses. Things become much more challenging in divorce proceedings, however, when one spouse seeks to retain control of marital assets by continuing to control interests that are held by...
Disastrous Business Partners Part 2: Confronting the Highly Dysfunctional Majority Owner
In the National Football League, quarterbacks may receive too much credit when their team wins and too much blame when they lose. It is easier celebrate or criticize the person we consider the face of the franchise. Perhaps this tendency comes from our experience in business world where the success or failure of...
Disastrous Partners: The Problem of Highly Dysfunctional Business Partners Part 1: Majority Owner Strategies In Dealing With Difficult Minority Investors
It feels like a sharp punch to the stomach – a physical reaction to the sudden realization that a longtime business partner’s actions have put the business at risk. This is not a disagreement over differing approaches to business issues. It is a full-blown crisis threatening the company’s continued existence. In these situations,...
When Sweeteners Turn Sour: Recent Texas Supreme Court Case Highlights Problems With Earn-Out Provisions in Private Company Purchase Contracts
Earn-out provisions in purchase contracts are “sweeteners” than can add significant value to the purchase price in the sale of private companies and these terms are increasingly being used in purchase contracts. This Post explains why the use of earn-out provisions is on the rise in purchase contracts, but it also signals a...