Private company business owners and investors face a host of challenges in the marketplace in their efforts to make their companies a success. As a result, they are often blindsided when they must suddenly deal with conflicts that arise with their business partners, which may be serious enough to threaten the company’s continued existence. Indeed, the Federal Bureau of Labor Statistics reports that roughly 20% of new businesses fail in their first two years with the failure rate growing to 45% in five years and 65% in 10 years.

“…roughly 20% of new businesses fail in their first two years with the failure rate growing to 45% in five years and 65% in 10 years.”

Federal Bureau of Labor Statistics

Less well known is that many the private businesses that fail do so, at least in part, because of conflicts between the company’s co-owners. Anecdotally, the conflicts among private company business partners seem to be increasing due to adverse impacts that have been caused by the COVID-19 pandemic.

Launching Bradley’s Business Divorce Blog

As business partner conflicts are on the rise, we are pleased to announce the launch of Bradley’s new Business Divorce blog. Our goal is to make the blog a valuable resource for majority owners and minority investors, as well as their legal and business advisors, in a wide variety of private businesses. We will also include information for spouses who are going through marital divorce proceedings and dealing with issues relating to the ownership of private companies and other complex property concerns in their divorce proceedings. 

Fortunately, many business partner conflicts are avoidable, or, at least, the disputes between partners may not be fatal to the company if the co-owners take reasonable precautions to arrange for an orderly partner exit in the future. Bradley’s Business Divorce team includes more than 20 attorneys with significant experience in working to head off future conflicts between business partners and, when necessary, prosecuting or defending claims by and between partners when they arise.

What to Expect

You can expect to hear from us regularly on a variety of topics related to the ownership of and investment in private companies on topics such as:

  • What are the key elements of a Buy-Sell Agreement (BSA) and why is it so important for both majority owners and minority investors to consider entering into a BSA before they accept an investment or make an investment in a private company?
  • Evaluation of key provisions included in private company governance documents.
  • What are some red flags that a potential investor should take heed of before making a minority investment in a private company?
  • When should a majority owner consider pulling the plug on a minority investor in the company based on problems and dysfunction caused by the investor?
  • What specific factors should a private company majority owner look for when considering accepting a potential significant PE investment in the company?
  • How do assignments of minority interests in LLCs take place and do minority owners continue to owe fiduciary duties following the assignment of the interest?
  • Analysis of the Texas statute that applies to derivative claims filed by shareholders or LLC members in closely held companies.
  • What concerns do spouses need to address when they transfer interests in private companies to each other in their divorce settlement?

How to Subscribe

To make sure you don’t miss updates from Bradley’s Business Divorce blog, subscribe to receive our posts via email. If you have any questions or suggestions for our blog, please contact us.

Sincerely,

Ladd Hirsch and Brian Gillett

Ladd Hirsch Brian Gillett

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Photo of Ladd Hirsch Ladd Hirsch

Ladd Hirsch is a solution-oriented trial attorney with more than 30 years of experience representing companies and high net worth business clients in complex litigation cases and arbitration matters. Ladd has focused a significant portion of his practice on handling business divorce disputes…

Ladd Hirsch is a solution-oriented trial attorney with more than 30 years of experience representing companies and high net worth business clients in complex litigation cases and arbitration matters. Ladd has focused a significant portion of his practice on handling business divorce disputes and related litigation for majority owners and minority investors in substantial private Texas companies. In these matters, Ladd files and defends claims against fiduciaries (officers, directors, managers, general partners and trustees), including claims for breach of fiduciary duty, breach of the entity governance documents and shareholder derivative claims. In his practice, he regularly works with family law attorneys and their clients to assist them with a wide variety of business and complex property issues that arise in family law proceedings.

Photo of Brian Gillett Brian Gillett
Brian Gillett is a trial attorney with experience handling high-stakes, complex commercial matters on both the plaintiff and defense sides at all stages of litigation in state and federal court and arbitration proceedings, from discovery through trial and appeal. Brian’s practice focuses on
Brian Gillett is a trial attorney with experience handling high-stakes, complex commercial matters on both the plaintiff and defense sides at all stages of litigation in state and federal court and arbitration proceedings, from discovery through trial and appeal. Brian’s practice focuses on business litigation matters, including disputes involving claims for breach of contract, fraud, and breaches of fiduciary duties. He has litigated both individual and class claims involving oil and gas disputes, intellectual property theft and infringement, and antitrust.