Business Divorce

To understand a “business divorce,” it helps to look at how most closely-held businesses begin: a group of close friends, colleagues, or family members share a vision of “the way things ought to be.” When everything is going smoothly, this kind of tight-knit business structure can be great: the company can make quick decisions and maximize opportunities. But when things start to go wrong, one (or more) of the tight-knit group may decide to leave the closely-held business. These “business divorces” can be as bitter, painful, and complicated as a dissolving marriage. The company has to find a way to remain viable, and the departing owners want to recoup the value they have put into the business. Because closely-held businesses rarely have a “succession plan” for departing executives, and because departing members often have no ready market for selling their ownership-interests, business divorces can present hard-edged legal and business problems.

Often, such business divorces require addressing numerous other legal issues, including contract disputes, such as whether the company agreement has been breached, and business torts, such as whether all the owners and managers have observed their fiduciary duties. And if the business divorce becomes acrimonious, there are frequently accusations of such breaches, fraud, and other business malfeasance. At Howard Law Group, PLLC, we have extensive experience litigating and resolving such issues and use that experience to help our clients avoid unnecessary conflict and risks when exiting a closely-held business.