BUSINESS DIVORCE

Sometimes there comes a point where those that have ownership interests in a business disagree on ideas or business decisions to a point where they simply can't work together anymore. In other instances, one of the owners tries to take advantage of the others. These scenarios, and others like these have been the catalyst that has brought on a premature demise to an otherwise strong business. The results of a situation like this can significantly reduce the value of each owner's interests and nobody wins. This is not the case for our clients. At Underberg & Kessler, we have a multi-disciplinary team of attorneys experienced in all of the legal competencies which are fundamental to the success of business divorce proceedings, including such as business law, contracts, tax, negotiations, and all aspects of litigation. After reviewing your matter, our attorneys in Rochester, Buffalo, Canandaigua, and Geneseo will determine and implement a plan in pursuit of your goals.

You can contact us here and learn more about business divorce matters below:

What is a business divorce?

A business divorce, in legal terms, is the separation of ownership interests in a business in the pursuit of business owners going their separate ways. This is often a time-sensitive matter that requires the management of issues that relate to the continued operation of the business in the face of legal and personal disagreements. If these issues are not navigated properly during the proceedings, the business' value can stand to be diminished quite a bit. This is why you need a well-versed attorney who has experience navigating these issues and has relevant cross-functional experience.

Do business divorce matters have to be resolved in court?

It is preferable for the parties to find a negotiated resolution. However, in order to get there your opponent(s) need to know that you have skilled and experienced counsel who are not afraid to litigate if necessary.

What happens to a corporation in a divorce?

The process typically starts with a discussion of the facts and circumstances followed by a demand letter from your attorney to the opposing party. If another business attorney has fired the first salvo, then we analyze the facts and circumstances from your perspective and prepare a reply. Meanwhile, the owners have to do their best to continue to operate the business. In some cases, there will be a need to start a court proceeding so that a receiver can be appointed to operate the business instead of the owners.

How does an LLC work in a divorce?

In New York, the LLC statute provides more limited opportunities for a member to commence dissolution litigation than is available under the corporation laws. It is imperative to carefully examine the operating agreement of the LLC to see what contractual provisions might apply.

Can I sell my share of the business during a business divorce?

There is nothing in New York law that precludes such a sale. However, there may be provisions in the governance documents of the entity that preclude that from happening. From a practical perspective, it may be difficult to find a buyer willing to step into the middle of the dispute. Under New York corporate law, there might be the ability to buy out the disgruntled shareholder once a dissolution proceeding has begun.