Business Divorce® Disputes

Closely held businesses are those with a small ownership group.   As you can imagine, business owners who work together well and who can resolve their disputes amicably are free to focus their energies on building their business.   Sometimes, though, serious disputes develop among the owners of a closely held business, and an amicable resolution is not possible.    In protracted disputes, one or the other owner may end up leaving the business, voluntarily or otherwise, and the disputes have the potential of moving to the courtroom. 

Underhill & Underhill, P.C. has represented business owners in litigation arising out of such shareholder disputes and partnership breakups for many years.   These disputes, which sometimes involve family members and former best friends,  can be just as emotional and acrimonious as the breakup of a marriage.   Worse, even when successful, this type of litigation has the potential of paralyzing the business, exhausting the owners and preventing the principals from moving forward with their lives and business interests.  

For these reasons, litigation, although sometimes necessary, is not always the best forum for resolving shareholder disputes.   Judicial remedies can sometimes be limited and ineffective.  Worse, litigation costs can rise rapidly on all sides if business owners cannot reach agreement on how to separate without destroying the business.

Jim Underhill coined and trademarked the term Business Divorce® to refer to the process of separating business partners, shareholders and members of closely held businesses, as well as the disputes and litigation that arise from that process.   The firm’s Business Divorce® services feature an early analysis of the situation and the underlying causes of the dispute.   The best way to handle these disputes before they consume the business itself is with an agreement that takes into consideration the long and short term interests of all the parties involved, including those of the business.

The firm helps clients extricate themselves from their business partners with  business solutions.   This is done through pre-planning, positioning, and framing the issues, and can be pursued through mediation or face-to-face discussions. 

However, when one side refuses to negotiate with the other or an agreement cannot be reached, litigation may be the only recourse left.   In that event, it is essential to streamline the litigation by focusing upon the important issues and avoiding litigating wasteful side issues.   Otherwise, the cost of litigating may consume the parties’ resources and threaten the business’ survival, results that serve no one’s purpose.  

Areas of Expertise:

•   Negotiating resolutions of shareholder and partner business disputes 

•   Mediation of Business Divorce® disputes as a neutral retained by both sides

•   Shareholder buy-outs through the purchase or redemption of ownership interests

•   Shareholder and member agreements

•   Litigation of Business Divorce® disputes, including shareholder derivative claims and breach of fiduciary duty litigation by and against corporate directors and officers and majority shareholders