Internal disputes can disrupt even the most successful family businesses. Lindquist & Vennum attorneys have helped hundreds of family business owners anticipate, avoid, diffuse, and resolve these disputes.
We help our clients solve family business disputes by gaining a thorough understanding of the factual issues and the perspectives of the key participants. Lindquist attorneys also work effectively with outside accountants, family business counselors, industry experts, and business valuators to help meet our clients’ objectives before and during the process to resolve family business conflicts and litigation. We carefully assess our clients’ rights as well as the likely outcome should a dispute move into litigation or result in a transfer of ownership interests. Many disputes can be resolved early and inexpensively through the careful identification and implementation of available options.
The best solutions to family business disputes often come from an appreciation of the special characteristics of family businesses:
Multiple Roles of Family Members
The simple fact that family members wear different hats as employees, officers, directors, or equity holders creates different expectations as to financial, governance and strategic aspects of the business. Differing expectations, if not put in the proper context, can create friction, divisiveness and mistrust.
Family business owners frequently put a premium on maintaining the confidentiality of their disagreements.
Legacy Rights and Expectations
Many family businesses operate under a set of legacy expectations or contractual governance requirements that have been passed down from prior generations. It is common for current generation family business owners to face challenges that the prior generation did not anticipate when structuring their company’s ownership and leadership, which makes governance decisions difficult and divisive.
Related by Blood and Equity
All of this is complicated by the fact that, unlike unrelated shareholders in closely-held businesses, family business owners are permanently connected even after shareholders have been bought out or their employment with the family business has been terminated.
Fortunately, family businesses sometimes also benefit from having unique resources available to prevent and resolve disputes. Familial connections and trusted relationships with outside influencers often facilitate dispute resolution. It is not uncommon for family business owners to be unaware of their company’s value and, correspondingly, the external resources that are available to finance the resolution of disputes or meet shareholder liquidity demands.
When litigation is unavoidable or the right strategic choice, we draw on our experience in successfully representing shareholders in dozens of family business lawsuits and arbitrations.