Fort Mitchell Business Divorce Attorneys Facilitate Smooth Transitions in Ownership
Skilled management of shareholder and partnership disputes
Like marriages, business associations are meant to endure, but at some point they may fall apart for a host of different reasons. If you formed a partnership or corporation with one or more colleagues but feel it’s time for one of you to move on, you might be ready for a business divorce. As in a dissolution of marriage, you will need to protect your rights and property as you transition to the next stage of your professional life. At Hemmer DeFrank Wessels, PLLC, our business attorneys are adept at negotiating smooth exits that can keep the organization viable while fairly compensating the parties involved. We draw on decades of experience to counsel our clients and to advocate strongly for the best possible outcome.
When is a business divorce an option?
A business divorce is appropriate when owners are in conflict over core issues affecting their company. These can include:
- Divergent visions for the company’s future
- Loss of trust in leadership and decision making
- Personality clashes making collaboration difficult or impossible
- Oppression of minority owners
When a business owner feels frustrated, deceived or marginalized, continuing in their role becomes untenable. It’s often best to cut ties and start over. However, an owner’s exit can be more complicated than you might expect, which is why you should consult an experienced business law attorney.
Options for separating an owner from the company
Whether an owner is leaving a business voluntarily or is being removed, there are three basic ways to proceed:
- Buyout — The remaining owners purchase the exiting owner’s interest. This is usually the most attractive option, but there might be obstacles. Do the remaining owners have the capital to make the purchase? If not, can they leverage company assets to make the deal? What happens if financing for a leveraged buyout is unavailable?
- Sale — The exiting owner sells his or her interest to an outside party. The first step is finding a willing buyer. The next step is making sure the buyer is acceptable to the other owners. Bringing new ownership into a closely held company is a delicate matter. The company agreements could severely restrict the seller’s options.
- Liquidation — The business is dissolved and the assets are sold and distributed to the owners. This is generally the least attractive option. If a business is thriving, or even if it hasn’t yet reached its potential, dissolving the company would be needlessly wasteful.
Each scenario presents challenges, but our experienced business litigation attorneys are adept at finding creative solutions that overcome impasses.
What are common issues that need to be resolved?
In a buyout or a sale to a third party, the major issues to be resolved include:
- Whether the company will continue to exist
- Valuation of the company
- Valuation of the exiting owner’s share
- Ownership of intellectual property
- Control of trade secrets
- Tax consequences to all involved
To navigate all of these crucial issues, you and your company need trustworthy guidance from knowledgeable business attorneys. That’s precisely what we offer at Hemmer DeFrank Wessels, PLLC.
Contact our Fort Mitchell law firm today for advice on business divorce
The experienced business attorneys at Hemmer DeFrank Wessels, PLLC helps business clients manage a multitude of issues surrounding business divorce. To schedule a consultation, call us at 859-344-1188 or contact us online. Our offices are conveniently located at 250 Grandview Drive, in Fort Mitchell, Kentucky.